•         THE  NEED  OF  THE  HOUR 

==^^~ 


An  American  Merchant  Marine 


GIFT  OF 


THE 

NEED  OF  THE  HOUR 

An  American  Merchant  Marine 


BY 

BENJAMIN  J.  ROSENTHAL 


CHICAGO 
PRIVATELY  PRINTED 

1915 


y^usT 


Copyright,  1915 

B.  J.  ROSENTHAL 


©efcicateb  to  jfHp  ©augftter* 

Gladys  R.  Eeifeld  and 
Elaine  V.  Rosenthal 


336429 


On    page    54   the   author   says: 

"It  seems  incredible — and  it  is  impossible  to  lay  too  much 
emphasis  upon  this  point — that  this  nation,  knowing  that  it  is 
sitting  on  a  bomb  which  at  any  moment  is  likely  to  explode 
and  smash  its  oversea  commerce  to  smithereens,  nevertheless 
simply  plays  with  fate,  hoping,  although  it  wants  to  be  neutral, 
that  England  and  France  will  continue  to  control  the  seas,  so 
that  Germany  cannot  get  out  and  destroy  any  of  the  ships~3.nd 
thus  injure  or  perhaps  destroy  our  own  oversea  commerce." 

In  the  light  of  a  recent  event,  perhaps  the  bomb  has  already 
exploded  and  this  nation  will  now  awake  to  the  imminent  dan- 
ger to  its  great  oversea  commerce. 


INTRODUCTORY 


/COMMERCIAL  Expansion  and  Merchant 
Marine  are  not  new  topics.  It  is  only 
because  of  the  present  European  war  that  these 
subjects  have  been  brought  into  such  promi- 
nence that  they  are  now  uppermost  in  the  minds 
of  the  American  people.  Almost  twenty  years 
ago  Mr.  Volney  W.  Foster  (who  has  since 
passed  away,  but  who  at  that  time  was  one  of 
Chicago's  leading  citizens)  in  a  talk  with  cer- 
tain of  his  friends  upon  his  return  from  Mexico, 
where  he  had  made  some  investments,  dwelt  at 
length  upon  the  possibilities  of  American  for- 
eign trade.  Shortly  thereafter  Mr.  Foster 
and  other  prominent  Chicagoans  formed  the 
National  Business  League  of  America,  the  car- 
dinal principles  of  which  were  the  upbuilding 
of  a  merchant  marine  and  the  improvement  of 
the  consular  service,  to  the  end  that  our  foreign 
trade  be  properly  safeguarded  and  increased. 
The  League  accomplished  much  that  was  bene- 
ficial and  of  value.  It  fought  for  the  establish- 

fv] 


INTRODUCTION 


ment  of  the  Department  of  Commerce,  and  to 
its  efforts  was  due  in  a  large  measure  the  success 
of  that  movement,  as  well  as  the  increased 
efficiency  of  the  consular  service.  In  December, 
1911,  the  First  National  Business  Congress  was 
held  at  Chicago,  under  the  auspices  of  the 
League,  in  the  Gold  Room  of  the  Congress 
Hotel,  and  many  of  the  leading  commercial 
organizations  of  the  United  States  were  repre- 
sented. The  expansion  of  our  foreign  trade  was 
the  principal  topic  for  discussion.  In  address- 
ing the  Congress  on  one  of  the  subjects  assigned 
to  him,  viz.,  "  How  to  Get  a  Merchant  Marine," 
the  author  made  the  following  remarks : 

"  The  $30,000,000  which  we  spend  annually 
for  harbor  improvements  would  be  spent  for 
our  own  benefit  instead  of  for  foreign  ship 
owners,  and  instead  of  paying  right  back  in 
freight  rates  the  money  that  we  take  in  for  our 
exports  in  excess  of  our  imports,  we  would  pay 
this  money  to  American  labor.  Instead  of 
allowing  a  foreign  pool  to  make  freight  rates 
for  American  shippers,  if  we  controlled  our 
merchant  marine  we  would  see  that  no  discrimi- 
nation was  made  against  the  American  shipper, 
and  In  case  of  'war  between  any  of  the  great 

[vi] 


INTRODUCTION 


shipping  nations  instead  of  having  our  com- 
merce paralyzed,  as  we  would  have  it  under 
present  conditions,  on  account  of  inability  to 
secure  ships  for  our  commerce,  we  would  go 
right  on  attending  to  our  business  and  shipping 
the  exports  of  our  nation  on  our  own  bottoms." 

The  author  is  referring  to  this  now,  because 
he  wants  to  emphasize  the  fact  that  the  subject 
is  not  a  new  one,  and  that  even  the  present 
war  was  not  entirely  unexpected  by  the  writer, 
who  had  returned  from  a  trip  abroad  shortly 
before  this  Congress  was  held,  and  during  that 
trip  had  noticed  with  a  great  deal  of  apprehen- 
sion the  significant  preparations  that  were  being 
made  by  the  great  nations  across  the  seas  by 
way  of  an  alarming  increase  of  appropriations 
for  military  purposes. 

And  so  what  was  considered  a  theory  a  few 
years  ago  has  to-day  become  a  stern  reality,  and 
we  are  face  to  face  with  what  I  regard  as  the 
greatest  crisis  that  has  confronted  our  republic 
since  the  Civil  War,  for  not  only  must  we  take 
care  of  the  population  of  the  United  States,  but 
I  believe  that  for  a  while,  at  least,  the  world's 
population  of  1,800,000,000  must  look  to  the 
resources  of  the  United  States  for  the  neces- 

[vii] 


INTRODUCTION 


saries  of  life,  food,  clothing  and  shelter.  Upon 
her  ability  to  get  these  products  to  the  nations 
of  the  world,  therefore,  will  depend  in  a  large 
measure  America's  right  to  take  rank  as  the 
world's  greatest  commercial  nation,  the  position 
she  should  properly  occupy.  Of  course,  there 
is  but  one  way  to  get  these  products  to  other 
countries,  —  by  ships,  —  and  as  we  have  prac- 
tically none  of  our  own  at  present,  except  those 
that  have  recently  accepted  American  registry, 
and  we  can  count  on  those  only  as  a  temporary 
makeshift,  this  book  is  therefore  written  in  the 
hope  that  it  will  serve  to  awaken  the  American 
nation  to  action,  for  when  once  aroused,  it  will 
accomplish  what  it  sets  out  to  do,  as  its  past 
history  has  shown.  It  is  hoped  that  this  book 
may  place  in  a  true  light  before  the  American 
people  the  paramount  necessity  of  the  hour, 
"  an  American  Merchant  Marine." 


[  viii  ] 


THE 
NEED  OF  THE  HOUR 


CHAPTER  I 

HISTORY  OF  OUR  MERCHANT  MARINE,  WITH  SPE- 
CIAL REFERENCE  TO  ITS  LEGISLATION 

July  4,  1789,  our  first  merchant  marine 
legislation  was  enacted  into  law.  It  pro- 
vided that  a  discount  of  10%  be  allowed  on  all 
duties  imposed  on  imports  in  vessels  wholly  the 
property  of  a  citizen  or  citizens  of  the  United 
States.  On  August  10,  1790,  further  legislation 
was  passed,  providing  for  an  addition  of  10%  of 
the  ordinary  duties  on  imports  in  foreign  ships. 
So,  in  order  to  induce  Americans  to  import  on 
American  bottoms,  not  only  was  a  discount  of 
10%  allowed,  but  a  penalty  of  10%  was  added  if 
the  goods  came  in  on  a  foreign  bottom.  This 
was  the  commencement  of  an  effort  on  the  part 
of  America  to  build  up  a  merchant  marine.  We 
were  not  much  of  a  seafaring  nation  while  under 

[i] 


THE  NEED  OF  THE  HOUR 


British  dominion,  for  it  was  ever  the  aim  of 
England  to  keep  this  valuable  business  under 
her  direct  control;  but  when  we  gained  our 
independence,  we  swept  aside  all  the  antiquated 
navigation  laws  that  had  been  imposed  upon  us 
by  England,  and  the  United  States  started  out  to 
build  up  its  own  merchant  marine. 

During  the  first  ten  years  marked  progress  was 
made  in  that  direction,  and  at  the  dawn  of  the 
new  century  we  were  carrying  80%  of  our  own 
products  on  American  bottoms.  In  the  next 
decade  additional  progress  was  made,  and  by 
1810  we  were  carrying  90%.  In  a  very  short 
time  thereafter  not  only  practically  all  our  own, 
but  a  large  portion  of  the  world's  commerce  was 
being  carried  by  our  ships,  and  our  maritime 
greatness  formed  the  most  splendid  period  in 
our  commercial  history,  for  we  led  the  world 
as  a  maritime  nation  and  then  occupied  the 
position  as  a  carrier  that  England  holds  at  the 
present  time. 

There  were  many  reasons  to  account  for  this 
splendid  progress  of  America  as  a  maritime 
nation.  In  the  first  place,  due  credit  must  be 
given  to  the  superb  energy  and  aggressiveness  of 
our  then  young  nation,  but  it  must  not  be  over- 

[2] 


AN  AMERICAN  MERCHANT  MARINE 

looked  that  the  era  of  the  Napoleonic  wars  was 
in  a  large  measure  responsible  for  our  progress, 
for  during  these  wars  the  foreign  shipping 
became  completely  demoralized,  and  the  com- 
merce of  the  world  was  left  practically  to  us. 
England  and  France  were  both  afraid  to  send 
out  ships,  each  fearing  that  they  would  be  cap- 
tured by  the  other,  and  as  these  nations,  with  the 
United  States,  were  then  the  carriers  of  nearly 
all  the  world's  commerce,  America,  realizing 
her  great  opportunity,  seized  it,  and  as  a  conse- 
quence became  mistress  of  the  seas.  That  great 
advantage  was  maintained  for  a  long  time  after 
the  close  of  the  Napoleonic  wars,  for  the  other 
nations  had  to  rehabilitate  their  commerce,  and 
it  took  some  time  for  them  to  regain  the  lost 
ground. 

While  from  that  date  until  1845  we  main- 
tained our  supremacy,  and  even  from  1845  till 
1856  we  still  carried  from  75%  to  85%  of  our 
oversea  commerce,  a  decline  set  in  from  1856, 
and  this  date  should  be  borne  well  in  mind,  for 
the  reason  that  most  writers  attribute  the  decline 
in  our  merchant  marine  to  the  Civil  War.  While 
it  is  true  that  from  1861  to  1866  the  percentage 
of  the  commerce  that  our  own  ships  carried 

[31 


THE  NEED  OF  THE  HOUR 


declined  from  65%  to  27%,  from  which  latter 
figure  it  recovered  until  in  1871  it  had  risen  to 
31%,  and  then  steadily  declined  until  it  finally 
dropped  to  its  present  low  figure,  8.9%,  still 
the  decadence  of  our  merchant  marine  cannot 
be  charged  to  the  Civil  War,  for  the  falling  off 
had  already  set  in  five  years  previous  to  the  war. 
The  war  was  but  one  of  the  incidents  that  led 
not  only  to  a  falling  off  in  our  merchant  marine, 
but  a  falling  off  in  all  commercial  progress, 
just  as  the  present  war  has  paralyzed  the  com- 
merce of  all  the  nations  which  are  in  any  way 
affected  by  the  war. 

We  can  trace  the  reasons  for  our  decline  with 
but  little  difficulty.  About  1840,  the  death  knell 
of  wood,  of  which  we  had  a  great  abundance, 
and  which  was  then  used  in  the  construction  of 
ships,  was  sounded,  and  iron  took  its  place,  and 
England  immediately  saw  her  golden  oppor- 
tunity to  again  take  possession  of  the  seas. 
America  at  that  time  had  practically  no  iron  or 
steel  industries  (for  up  to  1890  our  entire 
exports  of  manufactured  goods  were  only 
$100,000,000  annually,  while  in  1913  they 
reached  the  tremendous  proportion  of  $1,200,- 
000,000),  and  we  were  importing  the  prin- 

141 


AN  AMERICAN  MERCHANT  MARINE 

cipal  part  of  the  iron  and  steel  required  in  this 
country.  England,  with  its  abundant  supply  of 
iron  and  coal,  had  already  developed  her  iron 
manufacturing  industries,  and  before  we  could 
realize  our  shortcomings  England  had  con- 
structed better  and  faster  ships,  which  immedi- 
ately supplanted  our  poorer  and  slower  ones. 
Of  course  we  were  crippled  just  at  that  time  by 
our  war  at  home,  for  we  were  obliged  to  with- 
draw from  oversea  commerce  a  number  of  our 
ships,  and  when  we  recovered  from  the  war, 
England  had  so  far  outdistanced  us  that  she 
never  gave  up  the  great  advantage  to  which  she 
had  attained.  Instead  of  losing  any  part  of  this 
advantage,  she  steadily  added  to  her  tonnage, 
until  to-day  she  is  not  only  mistress  of  the  seas, 
but  during  the  present  war  she  controls  the  com- 
merce of  the  seas  and  her  oversea  tonnage  ex- 
ceeds the  combined  oversea  tonnage  of  all  the 
other  nations. 

Now  what  is  more  natural,  in  view  of  these 
facts,  than  that  history  should  again  repeat  it- 
self, and  while  the  foreign  countries  are  so 
busily  engaged  in  pursuits  of  war,  should  not 
this  nation  make  every  effort  to  regain  the  great 
prize  which  she  had  permitted  foreign  nations 

[51 


THE  NEED  OF  THE  HOUR 


to  capture  while  she  was  engaged  in  war?  We 
have  not  the  excuse  that  we  cannot  manufacture 
iron  and  steel  to  compete  with  England  or 
Germany,  for  we  now  land  steel  rails  in  Eng- 
land in  competition  with  that  country,  and 
transport  them  besides,  on  foreign  bottoms,  pay- 
ing liberal  rates  for  their  transportation,  and  our 
iron  manufactures  for  export  enter  every  civ- 
ilized country  of  the  globe  in  close  competition 
with  the  manufactures  of  the  world.  If  the 
United  States  does  not  now  take  advantage  of 
this  unequalled  opportunity,  she  may  never, 
probably  will  never,  have  a  chance  again  to 
regain  the  great  oversea  prestige  which  she  had 
sixty  years  ago. 

Reverting  again  to  legislation,  so  that  we 
may  have  before  us  a  complete  history  of  what 
we  have  done  to  obtain  a  merchant  marine  and 
to  regain  our  lost  prestige,  let  us  review  in  detail 
the  legislation  that  followed  the  law  of  1790 
in  relation  to  the  discount  and  discriminating 
duty.  On  March  3,  1815,  legislation  of  a  recip- 
rocal nature  was  passed,  which  provided  that  in 
case  any  country  admitted  imports  from  the 
United  States  in  American  vessels  on  terms  of 
equality  with  similar  imports  in  their  own  ves- 

[6] 


AN  AMERICAN  MERCHANT  MARINE 

sels,  the  President  was  authorized  by  the  Act 
to  exempt  from  the  additional  duty  imports  into 
the  United  States  from  such  foreign  countries  in 
vessels  belonging  to  those  countries.  Then  on 
May  22,  1824,  an  act  was  Passed  continuing  in 
force  the  additional  duty  of  10%  of  the  ordi- 
nary duties  on  imports  in  foreign  ships,  with 
the  proviso  that  the  additional  duty  should  not 
apply  to  foreign  ships  or  vessels  entitled  by 
treaty  or  by  any  act  of  Congress  to  be  admitted 
upon  the  payment  of  the  same  duty  that  is  ap- 
plied on  imports  in  ships  or  vessels  of  the  United 
States,  and  with  the  exception  that  the  addi- 
tional duty  was  changed  in  1861  from  10%  of 
the  ordinary  duties  to  10%  ad  valorem,  a  similar 
provision  has  appeared  in  practically  all  tariff 
acts  of  the  United  States  up  to  the  present  time. 
The  last  legislation  bearing  on  this  particular 
matter  was  passed  in  the  tariff  bill  of  October  3, 
1913,  except  that  the  discount  allowed  to  our 
importers  for  imports  on  American  ships  was 
made  5%  on  the  duties  assessed,  except  where  it 
violated  treaties,  but  the  legislation  of  October 
3,  1913,  with  reference  to  this  discount  has  been 
declared  unconstitutional  by  the  Attorney  Gen- 
eral of  the  United  States  and  is  now  in  the  courts 

[7] 


THE  NEED  OF  THE  HOUR 


awaiting  adjudication.  This  is  practically  the 
history  of  America's  efforts  to  build  up  a  mer- 
chant marine  by  the  discount  or  discriminating 
duty  plan. 

The  free  ship  plan  in  effect  sought  to  nullify 
the  law  whereby  all  materials  for  ships  im- 
ported into  this  country  had  to  bear  the  regular 
tariff  duties.  It  was  claimed  that  if  the  United 
States  permitted  such  materials  to  come  in  free, 
this  action  would  result  in  upbuilding  our  mer- 
chant marine.  This  was  finally  enacted  into  law 
under  the  Dingley  Tariff  Act,  but  it  appears 
that  it  had  no  favorable  effect  on  the  merchant 
marine.  It  was  then  claimed  that  even  with  free 
materials,  on  account  of  the  higher  wage  scale 
paid  in  America,  it  was  impossible  to  build  ships 
to  compete  with  ships  of  foreign  construction, 
and  a  clamor  went  up  for  the  admission  to 
American  registry  of  ships  built  abroad  but 
owned  by  Americans.  The  law  then  provided 
that  ships  built  within  five  years  (requiring 
ships  not  older  than  five  years)  and  owned  by 
Americans  could  be  so  registered,  and  finally, 
on  August  18,  1914,  a  law  was  passed  giving  the 
President  the  right  to  suspend  certain  maritime 
regulations  of  inspection  and  operation,  and  also 

[8] 


AN  AMERICAN  MERCHANT  MARINE 

permitting  all  American  owned  ships  irrespec- 
tive of  age,  to  come  under  American  registry. 
Under  this  law  up  to  February  18,  1915,  129 
ships  of  a  gross  tonnage  of  475,000,  have  come 
under  American  registry,  many  of  these  ships 
although  American  owned,  having  previously 
sailed  under  the  British  flag.  On  account  of  the 
action  of  the  British  government  there  is  some 
doubt  about  these  ships  being  safe  on  the  high 
seas  during  the  war. 

Of  these  newly  registered  ships,  there  are  but 
seven  of  seven  thousand  tons  or  over.  One  of 
these  ships  is  nearly  fifty  years  old,  one  is  forty, 
and  one-half  of  them  are  twenty-five  years  old, 
or  older.  There  are  no  fast  ships  amongst  them, 
most  of  them  being  slow  freighters  and  tankers. 

Legislation  has  also  been  introduced  from 
time  to  time,  and  especially  during  the  past 
quarter  of  a  century,  providing  that  this  govern- 
ment should  pay  a  subsidy  to  ship  owners  who 
would  build  and  operate  ships  under  the  Amer- 
ican flag.  The  history  of  this  legislation  would 
fill  volumes,  but  although  in  almost  every  Con- 
gress during  the  past  twenty-five  years  a  ship 
subsidy  bill  has  been  introduced,  and  although 
these  bills  appeared  to  have  the  backing  of  the 

[9] 


THE  NEED  OF  THE  HOUR 


wealth  and  influence  of  the  nation,  every  one 
has  been  consistently  defeated,  except  in  the 
cases  of  the  four  steamers  on  the  Atlantic,  which 
are  subsidized  for  the  carrying  of  the  mails,  and 
four  on  the  Pacific,  subsidized  for  the  same 
purpose. 

Other  legislation  has  been  presented  in  dif- 
ferent Congresses,  providing  for  some  form  of 
government  interest  in  ships,  and  the  legislation 
most  seriously  being  considered  by  the  govern- 
ment today  is  the  Alexander  bill,  which  pro- 
vides that  this  government  should  organize  a 
corporation,  51  %  of  the  stock  to  be  owned  by  the 
government,  the  balance  to  be  subscribed  for  by 
the  people,  and  the  government  to  build  or  pur- 
chase ships  to  be  used  for  the  transportation  of 
oversea  commerce.  Whether  or  not  this  bill  will 
be  enacted  into  law  remains  to  be  seen.  There  is 
much  sentiment  in  favor  of  it,  and  considerable 
opposition  as  well.  The  different  phases  of  pro- 
posed legislation  are  here  introduced,  simply 
that  the  reader  may  have  a  comprehensive  pur- 
view of  the  history  of  the  legislation  connected 
with  the  merchant  marine  from  the  birth  of  the 
republic  down  to  the  present  time. 

[10] 


CHAPTER  II 

OUR  NAVY  IN  ITS  RELATION  TO  A  MERCHANT 
MARINE 

ROM  the  standpoint  of  our  navy,  as  well  as 
our  commerce,  the  paramount  need  of  the 
American  nation  is  a  merchant  marine.  During 
the  past  quarter  of  a  century  volumes  have  been 
written  on  the  subject,  public  men  who  com- 
manded the  highest  respect  of  the  nation,  in 
fact  every  President  from  Cleveland  down  to 
Wilson,  has  urged  the  nation  to  build  up  its 
merchant  marine;  the  Admiral  of  our  navy, 
naval  officers  high  in  the  confidence  of  the  na- 
tion, and  leading  thinkers  have  written  and 
spoken  time  and  time  again  upon  the  great  im- 
portance of  a  merchant  marine,  not  only  for  the 
safeguarding  of  our  navy,  but  for  the  protection 
of  our  great  commerce.  Despite  all  these  ap- 
peals, despite  the  promises  of  all  the  political 
parties  contained  in  their  platforms,  to-day  we 
are  where  we  started  a  quarter  of  a  century  ago, 
except  for  a  temporary  war  measure,  just  en- 

FII] 


THE  NEED  OF  THE  HOUR 


acted  into  law,  in  the  shape  of  a  suspension 
during  the  will  of  the  President,  of  certain  of 
our  maritime  laws  that  enables  ships  owned  by 
Americans  formerly  flying  a  foreign  flag,  to  reg- 
ister under  American  registry,  but  none  of  these 
ships  would  be  of  much  use  to  our  navy  in  time 
of  war  even  if  we  could  impress  them,  as  they  are 
principally  slow  freighters  and  they  could  not 
keep  the  sea  beside  our  battleships. 

It  seems  incredible  that  a  nation  so  rich  in 
natural  wealth,  so  resourceful,  so  energetic,  so 
wide  awake  and  liberal  on  the  big  questions  of 
the  times,  should  permit  itself  to  sit  supinely  by 
and  see  its  great  navy  and  its  great  oversea  com- 
merce placed  in  dire  jeopardy.  It  has  been 
pointed  out  repeatedly  by  citizens  who  had  only 
the  welfare  of  our  nation  at  heart,  that  at  any 
moment,  through  no  fault  of  our  own,  our  great 
commerce  might  become  paralyzed  by  a  war  be- 
tween the  two  great  oversea  carrying  nations. 
This  thought  has  been  scoffed  at  and  passed  over 
with  more  or  less  contempt,  yet  to-day  what  is 
the  situation?  England  and  Germany,  the  great 
oversea  carrying  nations,  are  engaged  in  deadly 
conflict, —  Germany  with  its  entire  fleet  of  mer- 
chant marine  tied  up  either  at  its  own  docks  or 

[12! 


AN  AMERICAN  MERCHANT  MARINE 

at  the  docks  of  neutral  powers,  without  a  single 
ship  plying  between  our  country  and  hers,  Eng- 
land doing  what  she  can  to  keep  open  the  only 
means  of  transportation  between  this  country 
and  the  continent  by  reason  of  her  tremendous 
naval  strength,  yet  obliged  to  withdraw  a  large 
portion  of  her  merchant  marine  and  use  the 
ships  thus  withdrawn  as  auxiliaries  for  her  navy 
to  transport  her  soldiers  not  only  from  England, 
but  from  her  colonies  to  France  and  England. 
A  detailed  statement  issued  by  the  London  board 
of  trade  November  26,  1914,  sets  forth  that 
"  after  sixteen  weeks  of  war  1,221  German 
steamers,  representing  89.3%  of  Germany's  mer- 
cantile marine,  have  been  captured,  detained,  or 
have  sought  refuge  in  port.  In  the  same  period 
195  English  ships  have  similarly  been  removed 
from  the  mercantile  service,  representing 
2.0%  of  the  British  mercantile  marine." 
Meanwhile  our  nation,  which  has  so  much  at 
stake  on  account  of  its  vast  oversea  commerce, 
remains  in  an  uncertain  state,  not  knowing  from 
day  to  day  what  may  happen  to  its  commerce 
through  the  hostilities  of  the  nations  now  at  war, 
for  with  its  present  fleet  of  merchant  ships  its 
oversea  commerce  would  be  almost  wiped  out  of 

[13] 


THE  NEED  OF  THE  HOUR 


existence,  if  the  war  in  its  progress  should  result 
in  the  gradual  withdrawing  of  foreign  mer- 
chant ships,  a  situation  not  at  all  improbable. 

In  1860  over  50%  of  all  the  tonnage  of  Amer- 
ican and  foreign  vessels  entered  and  cleared  in 
the  foreign  trade  of  the  United  States,  was 
American  tonnage,  while  in  1913  about  75% 
represented  foreign  tonnage  and  25%  American. 
In  like  periods  the  percentage  of  the  value  of 
the  merchandise  carried  on  American  bottoms 
was  66%%  in  1860  and  less  than  9%  in  1913, 
while  twenty  years  previous  to  1860  it  was  almost 
85%  American  and  in  1825  it  was  over  92%,  so 
one  can  readily  note  the  steady  decadence  of  the 
American  merchant  marine,  and  just  as  we 
retrograded  England  advanced.  While  fifty 
years  ago  we  rivaled  England,  she  progressed 
so  rapidly  that  to-day  she  is  mistress  of  the  seas 
and  dictator  of  the  rates  our  shippers  shall  pay 
for  carrying  our  commerce,  and  she  has  been 
rather  a  hard  taskmistress  and  unusually  severe 
on  her  American  pupils. 

To-day  the  American  nation  possesses  just  a 
round  million  of  tons  of  oversea  tonnage,  plus 
475,000  tons  added  as  a  result  of  the  Registry 
law,  which  I  regard  as  temporary,  while  Eng- 

[14] 


AN  AMERICAN  MERCHANT  MARINE 

land  modestly  boasts  of  twenty  million  and  Ger- 
many five  million,  and  little  Norway,  with  a 
population  as  large  as  Chicago,  is  proud  in  the 
possession  of  twice  as  much  oversea  tonnage  as 
this  great  nation  with  its  one  hundred  million 
people.  England  with  its  roster  of  8,500  steam- 
ships engaged  in  oversea  commerce  looks  be- 
nignly down  on  America's  proud  fleet  of  less 
than  150  and  says,  "Is  it  possible  that  fifty  years 
ago  America  was  the  nation  that  set  us  the  exam- 
ple of  the  great  value  of  a  merchant  marine,  yet 
to-day  some  of  the  important  shipping  centers  of 
the  world  do  not  see  her  flag  for  years,"  and  then 
she  says,  "  Thank  you  for  building  up  for  us 
through  the  grace  of  your  patronage  our  splen- 
did merchant  ships  and  our  experienced  seamen, 
and  while  we  hope  we  shall  never  go  to  war  with 
you,  still  if  we  do,  we  will  have  to  convert  these 
merchant  ships  into  cruisers  and  we'll  use  them 
to  chastise  you." 

England  transports  over  90%  of  her  oversea 
commerce  while  Germany  transports  50%  and 
France  about  30%,  and  we  struggle  along  in  the 
unit  column.  There  is  but  one  consolation  in 
this  array  of  figures, —  below  units  we  cannot 
slip!  Think  of  a  nation  whose  oversea  com- 

[15] 


THE  NEED  OF  THE  HOUR 


merce  in  1913  reached  the  enormous  total  of 
nearly  $4,500,000,000,  whose  manufacturers  and 
producers  have  been  enabled  to  transport  less 
than  9%  of  this  stupendous  commerce  on  their 
own  bottoms,  and  have  been  obliged  to  depend 
upon  foreign  steamships  for  the  balance! 

The  question  of  the  present  war  has  no  bear- 
ing upon  the  necessity  of  a  merchant  marine  to 
augment  our  navy,  for  long  before  the  war  was 
dreamed  of  the  writer  as  well  as  many  others  has 
pointed  out  this  necessity. 

There  are  other  and  even  more  important 
reasons  why  America,  if  she  hopes  to  remain  a 
firstclass  nation,  must  immediately  and  hero- 
ically commence  the  rehabilitation  of  her  mer- 
chant marine.  These  reasons  will  have  consid- 
eration in  subsequent  pages. 

Our  navy  consists  of  230  war  ships,  including 
6  transports,  7  supply  ships  and  2  hospital  ships, 
21  colliers  of  95,000  tons  total  cargo  capacity. 
Now  see  how  helpless  this  great  navy  would  be 
in  case  of  war,  the  seat  of  which  was  3,000  miles 
from  home.  Where  would  we  get  transports  for 
our  army,  supply  ships,  scouts,  colliers  for  our 
coal,  ammunition  ships,  refrigerating  and  dis- 
tilling ships,  dispatch  vessels,  tugs  and  depot 

[16] 


AN  AMERICAN  MERCHANT  MARINE 

ships,  all  of  which  are  so  necessary  for  the  safety 
and  efficiency  of  our  navy?  We  could  not  buy 
these  ships  in  time  of  war,  for  the  neutrality 
treaties  forbid  it.  What  appears  on  paper  to  be 
a  magnificent  fleet  would  in  reality  be  of  little 
effect  for  lack  of  naval  auxiliaries  or  merchant 
marine.  The  other  great  nations  have  recog- 
nized this  necessity  and  have  built  up  an  ade- 
quate merchant  marine.  We  too  have  realized 
the  great  need  of  it,  but  little  has  been  done  to 
rectify  the  condition.  During  the  Spanish- 
American  War  we  learned  the  value  of  these 
auxiliaries.  We  were  enabled  to  purchase 
some  ships, —  this  was  before  the  present  treaty 
agreement  was  effected, —  and  we  paid  big 
prices,  but  they  were  of  great  value.  We  are 
to-day  equipped  to  provide  auxiliaries  for  two 
squadrons,  but  the  rest  of  our  battleships  would 
be  practically  helpless. 

A  member  of  Congress  in  a  plea  before  Con- 
gress for  the  upbuilding  of  a  merchant  marine, 
said:  "  In  time  of  war  the  best  thing  for  our  na- 
tion to  do  would  be  to  sink  our  battleships  to  pre- 
vent their  capture  and  use  against  us,  because 
our  ships  would  be  helpless  without  auxiliaries." 
Admiral  Dewey,  as  President  of  the  General 

[17] 


THE  NEED  OF  THE  HOUR 


Board,  in  a  report  to  Congress,  said:  "  In  time  of 
war  the  great  need  of  auxiliary  vessels  is  imme- 
diately felt  by  both  the  army  and  navy,  and  the 
existence  of  a  large  fleet  of  American  owned  ves- 
sels, available  at  once  for  conversion  into  trans- 
ports or  supply  ships,  would  undoubtedly  be  of 
great  importance  in  expediting  the  departure  of 
troops  and  in  supplying  them  after  departure. 
These  vessels  could  be  used  as  scouts,  colliers, 
ammunition  ships,  supply  and  refrigerating,  dis- 
tilling and  hospital  ships,  repair  and  torpedo 
depot  ships,  transports,  dispatch  vessels  and  tugs. 
The  most  important  service  that  a  merchant 
marine  could  accomplish  would  be  for  scout 
purposes,  when  the  sea  could  be  kept  and  good 
speed  made.  One  vessel  for  this  purpose  would 
be  needed  for  each  battleship.  The  navy  would 
need  a  number  of  colliers  of  at  least  5,000  tons, 
and  with  sufficient  speed  and  steaming  radius  to 
enable  them  to  accompany  a  squadron  of  battle- 
ships. There  should  be  five  such  colliers  for 
each  squadron  of  eight  battleships  with  its  at- 
tending cruisers.  A  number  of  colliers  of  less 
speed  and  carrying  capacity  would  also  be 
needed  for  keeping  the  coal  supply  replenished 
at  the  various  coal  depots,  and  for  other  pur- 

[18] 


AN  AMERICAN  MERCHANT  MARINE 

poses.  Ammunition  ships  of  about  4,000  tons 
carrying  capacity  would  be  required  for  the 
purpose  of  replenishing  the  ammunition  supply 
of  the  fleet  with  reserve  ammunition  in  case  of 
contemplated  action.  There  should  be  one  such 
vessel  for  each  squadron  of  eight  battleships 
with  its  attending  cruisers.  A  number  of  trans- 
ports would  also  be  needed  by  the  Navy  Depart- 
ment for  the  transportation  of  a  force  of  marines 
for  the  establishment  and  defence  of  advanced 
naval  bases.  Each  transport  should  be  capable 
of  carrying  at  least  one  battalion  of  marines  with 
complete  outfit  of  field  and  camp  equipage. 
Another  benefit  which  would  accrue  to  the  navy 
from  a  large  fleet  of  American  owned  merchant 
vessels  would  lie  in  the  large  number  of  experi- 
enced sea-going  men,  engineers,  and  firemen, 
accustomed  to  marine  engines  and  boilers,  who 
would  form  a  valuable  reserve  from  which  to 
draw  the  men  for  manning  the  auxiliaries." 

Admiral  Sperry,  who  took  part  of  our  great 
fleet  of  battleships  around  the  world,  says:  "  I 
did  not  once  see  a  merchant  ship  flying  our  coun- 
try's flag.  We  had  to  depend  upon  foreign  col- 
liers for  our  coal  supply,  and  when  they  failed, 
had  to  buy  coal  at  high  prices."  Think  of  it! 


THE  NEED  OF  THE  HOUR 


We  send  a  great  fleet  for  a  cruise  around  the 
world,  so  that  the  nations  of  the  world  might  see 
our  great  battleships,  and  then  are  made  the 
laughingstock  of  foreign  nations  when  they  see 
that  the  coal  to  keep  the  fleet  steaming  is  carried 
on  foreign  bottoms! 

Ex-President  Taft  says  that  "  if  we  were  com- 
pelled to  go  into  a  war  to-day,  our  merchant 
marine  lacks  altogether  sufficient  tonnage  of 
auxiliary  ships  necessary  to  the  proper  operation 
of  the  navy." 

Ex-President  Roosevelt  has  called  the  atten- 
tion of  the  country  many  times  to  our  lack  of  a 
merchant  marine,  and  President  Wilson,  in  a 
recent  message  to  Congress,  laid  special  stress 
upon  this,  our  great  weakness,  and  he  is  now 
making  an  earnest  effort  to  arouse  the  nation  to 
action. 

So  we  might  go  on  with  chapter  after  chapter, 
giving  the  views  of  the  best  statesmen  for  the 
past  quarter  of  a  century:  it  would  be  but  a 
repetition  of  the  same  story,  America's  great 
weakness,  her  lack  of  a  merchant  marine. 

When  the  history  of  the  present  European  war 
is  written,  it  will  be  seen  that  the  merchant 
marine  of  England  played  a  most  important 

[20] 


AN  AMERICAN  MERCHANT  MARINE 

part  in  whatever  success  the  allies  may  achieve, 
for  without  her  magnificent  merchant  marine  it 
would  have  been  impossible,  notwithstanding 
England's  fine  mobilization,  to  transport  her 
vast  army  in  time  to  give  France  and  Belgium 
that  immediate  succor  which  they  so  badly 
needed,  and  all  honor  will  be  given  to  the  mer- 
chant marine  of  England  that  so  gallantly  an- 
swered the  call  when  troops  had  to  be  trans- 
ported in  such  large  numbers.  It  has  also  been 
possible  for  England,  with  her  merchant  marine, 
to  get  supplies  which  are  the  necessary  adjunct 
to  a  perfect  fighting  machine.  So  when  we 
realize  what  England's  merchant  marine  has 
accomplished,  both  in  the  present  war  and  dur- 
ing the  Boer  War  in  quickly  transporting  a  vast 
army,  need  we  dwell  further  on  the  great  neces- 
sity of  an  American  merchant  marine  to  aug- 
ment our  navy?  Did  the  author  make  too  strong 
a  statement  when  he  said,  at  the  outset,  that  the 
paramount  necessity  of  the  American  nation  is  a 
merchant  marine?  No  sane  man  realizing  the 
facts  as  they  exist  to-day  will  dispute  this  state- 
ment. The  American  nation  has  slept  so  long 
on  this  question  that  the  author  realizes  he  has 
undertaken  an  herculean  task  if  he  expects  to 

[21] 


THE  NEED  OF  THE  HOUR 


awaken  her  even  for  a  moment  of  reflection,  but 
assuming  that  recent  events  have  awakened  her 
to  her  great  need,  it  is  hoped  that  this  presenta- 
tion of  facts  may  rouse  her  from  her  apathy.  We 
who  know  what  our  country  can  accomplish 
when  once  stirred  to  action,  can  look  forward  to 
the  quick  and  permanent  restoration  of  the 
American  flag  on  the  high  seas  and  the  return 
of  the  American  seaman  on  ships  engaged  in  the 
oversea  commerce  of  the  world. 


[22] 


CHAPTER  III 

WHAT  OUR  MERCHANT  MARINE  WOULD  ACCOM- 
PLISH FOR  OUR  NAVY 

NTIRELY  aside  from  the  fact  that  an  ade- 
quate merchant  marine  would  be  of  inesti- 
mable value  to  our  navy  for  its  use  as  auxiliaries, 
it  seems  almost  criminal  not  to  have  a  sufficient 
number  of  transports  for  our  great  battleships. 
This  would  be  true,  even  though  there  were  no 
commercial  issues  involved.  Our  great  water 
front  requires  these  merchant  ships  to  safeguard 
the  independence  of  our  nation.  If  we  possessed 
a  merchant  marine  such  as  England's,  or  even  as 
magnificent  a  one  as  Germany  has,  that  would 
immediately  place  us  in  the  front  rank  as  the 
leading  commercial  nation  of  the  world,  and 
notwithstanding  our  fine  commercial  standing 
to-day,  we  can  never  hope  to  be  the  first  nation 
of  the  world  until  we  are  in  a  position  where  we 
carry  at  least  the  greater  portion  of  our  oversea 
commerce  on  our  own  ships,  for  our  commerce 

[23] 


THE  NEED  OF  THE  HOUR 


is  never  safe  so  long  as  it  is  dependent  upon 
foreign  bottoms. 

There  are  many  Americans  who  are  now  con- 
gratulating themselves  that  the  free  ship  bill  has 
been  passed  by  Congress  and  that  some  129  ships 
with  a  combined  tonnage  of  475,000  have  come 
under  American  registry,  relieving  the  situation 
in  some  slight  degree,  and  although  the  freight 
rates  have  already  been  advanced  in  some  cases 
1000%,  we  are  thankful  it  is  no  worse.  But  it 
must  be  borne  in  mind  that  this  is  but  a  tem- 
porary makeshift,  and  as  soon  as  the  war  is  over 
in  all  probability  we  will  again  be  where  we 
were  before  the  commencement  of  hostilities. 
Therefore  if  we  hope  to  build  up  a  merchant 
marine,  what  we  do  must  be  on  a  permanent 
basis,  and  the  legislation  known  as  the  free  reg- 
istry bill  will  not  accomplish  any  permanent 
effect  toward  that  end,  as  will  be  explained  later. 

To  give  an  example  showing  the  insufficiency 
of  our  merchant  marine:  During  the  recent 
imbroglio  with  Mexico  it  was  necessary  to  trans- 
port a  brigade  of  troops  from  Galveston  to  Vera 
Cruz,  and  ridiculous  as  it  may  appear,  it  is  nev- 
ertheless a  fact  that  the  War  Department  an- 
nounced that  it  would  be  unable  to  move  the 

[24] 


AN  AMERICAN  MERCHANT  MARINE 

entire  brigade  ordered  from  Galveston  to  Vera 
Cruz  in  the  then  available  transports.  The  De- 
partment made  the  statement  that  "  it  would  be 
necessary  to  charter  merchant  vessels  for  the 
movement  of  the  troops/'  that  "  it  was  not  in  a 
position  to  complete  arrangements  for  such 
ships,"  and  that "  further  authorization  and  fur- 
ther funds  were  needed  through  Congressional 
action."  Now,  if  we  have  not  enough  trans- 
ports to  move  a  single  brigade  of  soldiers  from 
Galveston  to  Vera  Cruz,  can  you  realize  how 
utterly  helpless  we  would  be  if  we  really  had  to 
move  an  army  by  sea  to  fight  some  foreign  foe? 
Let  us  see  what  an  extensive  merchant  marine 
could  accomplish  if  controlled  by  our  own  citi- 
zens. The  world's  oversea  commerce  is  esti- 
mated at  approximately  $40,000,000,000,  of 
which  our  share  is  $4,250,000,000,  or  about  10%. 
Of  this  $40,000,000,000  the  nations  now  at 
war  contribute  over  $21,000,000,000,  of  which 
they  purchase  or  consume  about  $i  1,000,000,000, 
and  produce  in  excess  of  their  needs  for 
export  about  $10,000,000,000.  At  this  time 
these  nations  are  producing  but  a  trifle  of 
this  vast  amount,  and  practically  little  for 
export,  so  that  not  only  these  nations,  but  the 

[25] 


THE  NEED  OF  THE  HOUR 


entire  population  of  the  world,  estimated  at 
1,800,000,000,  will  shortly  be  dependent  for 
a  large  part  of  the  necessaries  of  life  upon  our 
market.  This  would  not  be  such  a  gigantic  re- 
sponsibility for  us  to  undertake,  if  we  felt  sure 
that  our  surplus  products  could  be  readily  trans- 
ported to  the  points  that  would  require  them. 
But  what  are  the  facts?  At  Hoboken  alone  there 
are  over  300,000  tons  of  merchant  ships,  princi- 
pally German,  tied  up  at  the  docks,  and  the  bal- 
ance of  the  German  merchant  ships  are  tied  up 
in  other  neutral  ports  and  in  Germany,  and  a 
large  part  of  the  English  and  French  ships  are 
withdrawn,  entire  fleet  of  liners  like  the  White 
Star  and  Cunard  being  withdrawn  principally 
because  they  are  needed  as  transports  by  France 
and  England  for  their  armies  and  for  seacoast 
defense.  It  is  reliably  estimated  that  since  the 
war  nearly  6,000,000  gross  tons  of  ocean  going 
vessels  flying  belligerent  flags  have  been  with- 
drawn from  commercial  use,  or  about  13%  of 
the  world's  total  supply  of  tonnage.  We  are, 
therefore,  dependent  entirely  upon  a  few  Eng- 
lish ships,  the  few  ships  of  the  Italian,  Dutch, 
and  Norwegian  lines,  and  the  Japanese  lines, 
aside  from  those  that  have  registered  under 

[26] 


AN  AMERICAN  MERCHANT  MARINE 

American  registry  since  the  passage  of  the  Free 
Ship  law,  and  the  few  ships  we  had  sailing 
under  our  flag  at  the  time  of  the  breaking  out  of 
hostilities.  This  may  be  sufficient  while  ship- 
ping is  light,  but  whether  the  war  be  ended  in 
the  near  future  or  not,  it  will  be  but  a  very  short 
time  before  the  supplies  in  reserve  by  the  na- 
tions at  war  as  well  as  the  others,  will  be  ex- 
hausted and  there  will  come  an  unprecedented 
demand  for  the  exports  of  the  United  States  and 
of  other  countries  having  a  surplus,  and  from 
where  will  the  ships  come  to  meet  this  demand? 
We  are  so  ready  to  travel  the  path  of  least  re- 
sistance, that  we  seem  willing  to  reconcile  our 
action  with  the  old  proverb,  "  Sufficient  unto  the 
day  is  the  evil  thereof,"  and  that  inaction  has 
been  responsible  for  our  present  plight.  Just 
look  at  the  commercial  expansion  of  Germany, 
and  compare  it  with  the  tremendous  growth  of 
her  merchant  marine.  You  will  see  that  the  one 
is  coincident  with  the  other.  Germany's  expan- 
sion commenced  about  the  time  when  the  present 
Emperor  ascended  the  throne.  Almost  his  first 
public  utterances  were  for  an  expansion  of  Ger- 
many's foreign  commerce  and  a  great  merchant 
marine,  and  suiting  the  action  to  the  word  he 

[27] 


THE  NEED  OF  THE  HOUR 


commenced  the  upbuilding  of  both,  and  many 
historians  will  maintain  that  Germany's  great 
commercial  expansion  caused  the  ill  feeling  that 
existed  against  her  in  England  especially,  and 
they  will  attribute  the  war  to  this  ill  feeling.  Be 
that  as  it  may,  the  fact  remains  that  Germany's 
trade  expansion  up  to  the  breaking  out  of  the 
war,  was  greater  than  that  of  any  foreign  coun- 
try, America  not  excepted. 

About  a  year  ago  the  German  ambassador  to 
the  United  States  issued  the  statement  that  Ger- 
many had  made  greater  advance  in  foreign 
trade  than  any  other  nation.  He  gave  out  figures 
showing  that  German  imports  had  increased 
during  the  last  forty  years  by  208%  to  $2,668,- 
000,000  and  its  exports  262%  to  $2,258,000,000. 
He  added  that  Germany  accomplished  this  in 
competition  with  the  United  States,  notwith- 
standing the  great  natural  resources  of  the 
United  States  and  its  great  influx  of  immigrants, 
in  the  prime  of  life.  He  showed  that  between 
1872  and  1911  the  total  foreign  trade  of  the 
United  States  increased  236%  and  that  of  Ger- 
many 199%,  but  during  the  decade,  1901  and 
1911,  the  German  increase  was  143%  and  that  of 
the  United  States  105%,  and  he  also  showed  that 

[28] 


AN  AMERICAN  MERCHANT  MARINE 

the  value  of  the  foreign  trade  of  the  United 
States  in  1911  was  $3,718,820,000,  while  Ger- 
many's was  $4,452,000,000.  So  when  you  take 
into  consideration  that  the  population  of  Ger- 
many is  about  65,000,000  and  that  of  the  United 
States  50%  greater,  when  you  take  into  account 
also  our  great  natural  resources,  our  boasted 
energy  and  splendid  manhood,  one  cannot  fail  to 
admire  the  wonderful  progress  Germany  has 
made.  So  with  this  splendid  example  before  us, 
of  enterprise  and  success,  ought  we  to  rest  satis- 
fied, even  though  the  past  twenty-five  years  show 
gratifying  results? 

Consider  these  figures:  Great  Britain  buys 
over  $3,000,000,000,  and  20%  of  it  comes  from 
us.  France,  $1,500,000,000,  11%  from  us,  and 
the  Netherlands  $1,500,000,000  and  10%  from 
us.  Now  it  can  readily  be  seen  that  on  account 
of  the  war  the  United  States  must  place  herself 
in  a  position  to  take  care  of  the  greater  part  of 
this  vast  commerce,  although  to-day  she  supplies 
but  15%,  and  how  can  she  do  it  if  she  has  not  the 
ships  to  transport  the  supplies  that  will  be 
required? 

Of  the  goods  exported  by  the  United  Kingdom 
85%  are  manufactured  goods,  Germany  exports 

[29] 


THE  NEED  OF  THE  HOUR 


about  58%,  France  about  47%,  and  in  exchange 
for  these  manufactured  goods  the  countries  buy 
food  stuffs  and  raw  materials.  While  they  are 
at  war  they  can  manufacture  but  a  small  per 
cent  of  their  former  capacity,  as  their  plants  are 
disorganized  and  depleted,  but  their  consump- 
tion of  the  necessaries  of  life  will  necessarily  be 
almost  as  great.  How  will  this  shortage  be  sup- 
plied, if  not  by  the  United  States? 

To  give  you  an  idea  of  what  it  means  for  the 
United  States  to  have  a  merchant  marine:  In 
April,  1914,  the  Hamburg  American  line  in- 
augurated a  regular  freight  and  passenger  serv- 
ice between  New  York  and  the  ports  of  the 
Levant  and  the  Black  Sea.  This  was  our  first 
direct  and  regular  communication  between  these 
important  ports.  According  to  the  folders  issued 
by  the  Hamburg  American  line,  it  was  intended 
that  our  country  should  have  regular  communi- 
cation every  month  to  Constantinople  and  the 
Black  Sea  ports  via  Italy  and  Greece.  For  the 
first  time  in  fifty  years  direct  freight  communi- 
cation was  established  between  the  United  States 
and  Constantinople  and  the  Black  Sea  ports. 
We  sold  Turkey  about  $5,000,000  last  year,  and 
next  to  Great  Britain  we  bought  more  of  Turkey 

[30] 


AN  AMERICAN  MERCHANT  MARINE 

than  any  other  nation  ($20,000,000) .  Now,  just 
as  we  were  preparing  to  push  our  trade  with 
these  countries  by  means  of  this  regular  com- 
munication, and  by  reason  of  which  we  could 
probably  have  turned  that  balance  of  trade, 
which  was  $15,000,000  against  us  last  year,  into 
a  surplus, —  Germany  becomes  involved  in  war, 
all  her  merchant  ships  are  withdrawn,  and  we 
are  again  left  without  regular  service  to  these 
important  seaports,  and  although  we  are  entirely 
innocent  in  the  matter,  we  must  suffer  the  de- 
rangement of  our  commerce,  because  we  are  not 
far-sighted  enough  to  control  our  own  commerce 
and  are  willing  to  be  at  the  mercy  of  foreign 
carriers.  Not  long  ago  the  author  personally 
visited  the  steamship  offices  and  told  the  clerks 
in  charge  that  he  wanted  to  ship  some  household 
goods  to  Constantinople.  He  was  informed  at 
the  Hamburg  American  office  that  all  the  ships 
were  withdrawn,  and  the  only  possible  way  was 
to  ship  by  some  English  line.  He  then  visited 
the  offices  of  the  International  Mercantile  Ma- 
rine Co.,  which  controls  the  principal  English 
lines  from  our  country  to  Europe.  He  was  in- 
formed that  they  could  offer  no  solution  of  the 
problem,  that  the  best  he  could  do  was  to  ship 


THE  NEED  OF  THE  HOUR 


to  Liverpool,  then  try  to  transship  when  a  vessel 
could  be  gotten  sailing  from  Liverpool  to 
Greece,  and  then  transport  from  Greece  to  Con- 
stantinople. This  is  a  good  illustration  of  the 
present  chaotic  condition  of  our  shipping. 

Now  note  the  result  of  discontinuing  shipping 
communication  between  nations.  Germany,  be- 
cause unable  to  protect  her  ships,  is  shut  off 
from  America,  and  our  exports  to  that  country 
dropped  from  $21,301,274  in  August,  1913,  to 
$68,737  m  August,  1914,  while  our  exports  to 
the  United  Kingdom  dropped  only  from  $38,- 
355,184  to  $32,951,250,  and  to  France  from 
$10,750,624  to  $7,420,800  and  from  now  on  as 
the  war  continues  our  exports  to  the  United 
Kingdom  and  France  will  increase. 

Germany  needs  almost  everything  that  Amer- 
ica produces,  but  she  cannot  get  her  supply  from 
us,  because  England  with  her  great  merchant 
marine  controls  the  seas.  We  have  the  only 
available  wheat  surplus  of  sufficient  size  to  be  of 
real  service  at  a  time  when  it  will  be  most  re- 
quired, but  of  course,  ships  are  required  to  trans- 
port it.  Cast  your  eye  for  a  moment  on  the  South 
American  situation.  Germany  exported  to  Ar- 
gentina alone  last  year  about  $62,000,000,  to 

[32] 


AN  AMERICAN  MERCHANT  MARINE 

Brazil  $53,000,000,  to  Chile  $33,000,000.  What 
country  is  able  to  supply  these  exports  to  the 
above  named  republics?  The  United  States  will 
be  looked  to  for  most  of  this  supply.  Last  year 
Latin  America's  foreign  commerce  amounted  to 
nearly  $3,000,000,000,  of  which  approximately 
two-thirds  were  European  transactions.  In  1913 
England  exported  $30,000,000  to  Chile  and 
France  about  $15,000,000. 

Note  how  our  exports  to  foreign  countries  are 
apportioned: 

British  territory,  including  Great  Britain  and 
her  colonies  takes  $1,134,000,000,  or  46%  of  our 
total  exports;  Germany  $332,000,000,  and 
France  $146,000,000;  Netherlands  $126,000,- 
ooo ;  Italy  $76,000,000;  Cuba  $71,000,000;  Bel- 
gium $67,000,000;  Japan  $58,000,000;  Mexico 
$54,000,000;  Argentina  $53,000,000;  Brazil 
$43,000,000;  British  Australasia  $52,000,000; 
Spain  $31,000,000;  Russia  $25,000,000;  China 
$22,000,000. 

With  all  these  facts  before  us,  it  can  readily 
be  seen  what  a  merchant  marine  could  accom- 
plish in  the  upbuilding  of  our  commercial  trade. 


[33] 


CHAPTER  IV 

AMERICA'S  GREAT  RESOURCES  MUST  HAVE  AN 
OUTLET 

T  WILL  first  of  all  give  my  readers  a  brief 
digest  of  our  nation's  great  resources,  so  that 
they  may  judge  for  themselves  of  the  absolute 
and  immediate  necessity  of  finding  an  outlet  for 
our  tremendous  surplus.  As  trade  unquestion- 
ably follows  the  flag,  the  natural  thing  to  do  is 
to  build  up  a  merchant  marine  to  carry  our  sur- 
plus products  abroad  and  bring  back  the  sur- 
plus products  of  foreign  nations,  for  after  all, 
commerce  is  but  an  exchange  of  the  surplus 
products  of  one  nation  for  those  of  another,  and 
God  in  his  inestimable  wisdom  has  given  this 
nation  an  almost  inconceivable  abundance. 

In  order  that  a  better  conception  of  the  mag- 
nificent resources  of  the  United  States  may  be 
had,  I  will  present  first  of  all  a  few  comparative 
statistics,  showing  the  approximate  share  of  the 
United  States  in  the  world's  wealth  and  com- 
merce, compared  with  the  world's. 

[34] 


AN  AMERICAN  MERCHANT  MARINE 


U.  S.  World's 

Square  Miles.  Per  cent. 

The  area  of  the  United  States  is 3,600,000  7 

Population    102,000,000  6 

Corn  products,  bushels 2,600,000,000  68 

Wheat  products,  bushels 911,000,000  20 

Cotton  products,  bales 14,000,000  61 

Sugar  products,  pounds 3,577,000,000  10 

Tobacco  products,  pounds 791,000,000  35 

Number  of  cattle  on  farms 59,000,000  15 

Coal  product  (short  tons) 534,000,000  40 

Petroleum  product,  barrels 238,000,000  63 

Copper  products,  pounds 1,243,000,000  55 

Iron  ore  (long  tons) 57,000,000  42 

Gold   product,   dollars $         93,000,000  20 

Stock  of  gold,  dollars 1,880,000,000  22 

Value  of  all  farm  products 9,751,000,000  no  data 

Value  of  manufactures 20,672,000,000 

Imports  of  fiscal  year  1914 1,894,000,000  9 

Exports  of  fiscal  year  1914 2,365,000,000  12 

Foreign  trade  of  fiscal  year  1914 4,259,000,000  10 

Domestic  trade  of  fiscal  year  1914....     40,000,000,000  no  data 

Railways,  miles   259,000  38 

Aggregated  wealth,  estimated $140,000,000,000  no  data 

Thus  it  can  readily  be  seen,  by  a  careful  study 
of  these  statistics  which  are  authorized  by  the 
Department  of  Commerce,  that  the  United 
States  probably  furnishes  40%  of  the  combined 
items  enumerated  above,  which  are  the  princi- 
pal necessaries  of  life.  And  this  is  not  all  the 
story,  for  we  have  vast  areas  of  land  that  will 
gradually  be  inhabitated,  areas  that  can  com- 

[351 


THE  NEED  OF  THE  HOUR 


fortably  house  and  maintain  five  times  the  pres- 
ent population,  for  Germany  with  an  area  of 
208,780  square  miles  supports  70%  of  the  pop- 
ulation of  America  and  her  area  is  but  .058%  of 
that  of  America.  At  the  close  of  the  present  war 
it  wrill  probably  be  found  that  the  flower  of  what 
is  left  of  the  foreign  nations  on  account  of  the 
nations'  impoverished  condition  will  seek  Amer- 
ica and  settle  here,  and  this  vast  immigration 
will  realize  that  our  abundant  resources  will 
furnish  them  ample  opportunity  for  home 
making. 

It  is  further  evident  from  the  previous  statis- 
tics, that  with  a  population  of  only  6%  of 
the  world  our  nation's  resources  and  possi- 
bilities are  far  beyond  those  of  any  other  nation, 
and  when  it  is  taken  into  consideration  that  the 
immigrants  admitted  into  this  country  are  mostly 
in  the  prime  of  life,  men  who  for  the  greater 
part  come  to  make  this  their  permanent  home 
and  to  develop  the  unbounded  natural  resources 
of  our  great  country,  one  can  readily  realize 
America's  splendid  opportunity  to  become  the 
world's  greatest  commercial  power. 

The  commerce  of  the  world,  so  far  as  ascer- 
tainable,  for  the  seventy-five  countries  and  polit- 

[36] 


AN  AMERICAN  MERCHANT  MARINE 

ical  groups,  is  about  $40,000,000,000,  imports 
being  $21,000,000,000  and  exports  $19,000,000,- 
ooo.  The  excess  of  imports  is  accounted  for  by 
the  fact  that  many  nations  include  in  their  im- 
ports the  cost  of  freight,  insurance,  and  other 
charges  between  point  of  shipment  and  arrival. 
It  is  to  be  noted  that  the  older  and  more  advanced 
nations  show  an  excess  of  imports  over  exports, 
but  nearly  all  American  countries  show  larger 
exports  than  imports.  Our  export  balance 
exceeded  $600,000,000  during  the  last  fiscal  year. 
While  the  world's  carrying  power  in  tons  has 
shown  a  large  increase,  yet  in  number  of  steam- 
ships its  fleet  has  decreased,  which  shows  conclu- 
sively a  tendency  toward  larger  carrying  units, 
and  this  significant  fact  should  be  taken  into 
careful  consideration  in  connection  with  the  up- 
building of  a  merchant  marine.  While  this 
country  ranks  second  in  number  of  tonnage  of 
vessels  engaged  in  commerce,  this  is  due  to  the 
vast  number  engaged  in  lake  and  ocean  coast- 
wise trade,  for  the  number  of  American  vessels 
engaged  in  foreign  trade  has  declined  since  1883 
to  1913  from  1,302,095  tons  to  1,027,775,  while 
the  carrying  trade  of  the  United  States  engaged 
in  lake  and  coastwise  trade  increased  from 

[37] 


THE  NEED  OF  THE  HOUR 


3,657,304  to  9,798,561  tons.  Taking  the  entire 
tonnage  of  the  world,  estimated  at  47,000,000 
gross  tons,  40%  is  credited  to  Great  Britain, 
21%  to  the  United  States,  11%  to  Germany, 
about  5%  to  Norway  and  France,  3%  each 
to  Holland,  Italy  and  Japan,  and  2%%  to 
1 24%  to  Russia,  Sweden,  Austria,  Hungary, 
Denmark  and  Spain.  But  when  you  place 
beside  these  figures  the  percentage  of  ton- 
nage of  the  United  States  engaged  in  oversea 
commerce  —  less  than  10%  —  and  consider  that 
from  1883  our  lake  and  coastwise  tonnage  in- 
creased 168%  and  our  foreign  tonnage  declined 
21%,  you  will  quickly  reach  the  conclusion  that 
there  is  "  something  rotten  in  Denmark,"  and 
that  it  is  about  time  that  our  nation,  with  an 
oversea  commerce  of  $4,250,000,000,  a  nation 
that  aspires  to  be  a  world  power,  should  take 
some  summary  and  wise  action. 

Consular  reports  received  right  before  the 
war  indicated  that  many  of  the  leading  nations 
were  enlarging  their  shipping  facilities  for  an- 
ticipated increase  of  trade  through  the  Panama 
Canal,  which  our  nation  built  at  a  cost  of  $400,- 
000,000,  for  these  nations  expect  that  the  mar- 
kets of  Western  South  America,  Australasia,  and 

[38] 


AN  AMERICAN  MERCHANT  MARINE 

Eastern  Asia  will  be  stimulated  by  the  opening 
of  the  Canal.  The  countries  fronting  on  the  Pa- 
cific have  an  aggregate  import  trade  of  over 
$2,000,000,000,  and  the  share  of  the  United 
States  in  that  trade  would  be  most  advanta- 
geously affected  through  the  shortening  of  dis- 
tance and  improvement  in  transport  facilities. 

Of  this  entire  trade  we  now  supply  about  10%, 
a  much  smaller  proportion  than  appears  in  our 
trade  with  nearer  and  better  served  communities, 
from  the  standpoint  of  steamship  lines.  Our 
vast  area  of  three  and  two-thirds  million  square 
miles,  representing  every  variety  of  climate  and 
production,  being  nearly  equal  in  extent  to  all 
Europe,  which  has  a  population  five  times  that 
of  this  country,  together  with  our  natural  re- 
sources, our  splendid  energy  and  system,  gives 
us  with  the  Panama  Canal,  a  decided  advantage 
over  every  European  nation,  and  when  one  con- 
siders that  we  not  only  produce  sufficient  for  our 
own  great  requirements  but  that  we  have  an 
abundance  to  supply  the  world,  one  is  forced  to 
question,  "  What  is  wrong  with  us?  "  And  the 
answer  is  a  simple  one  —  lack  of  adequate  com- 
munication between  our  nation  and  those  who 
would  gladly  purchase  our  surplus  at  good 

[391 


THE  NEED  OF  THE  HOUR 


prices,  for  whether  you  look  on  the  farm  or  in 
the  fields,  or  search  below  the  ground,  you  find 
a  great  storehouse  of  supplies  for  all  the  re- 
quirements of  man,  food,  clothing,  and  shelter. 

While  we  send  to  the  Pacific  ports  only  about 
$200,000,000  of  their  total  imports  of  $2,000,- 
000,000,  or  10%,  we  buy  of  them  about  $300,- 
000,000,  or  1 5%  of  their  exports,  and  to  the 
entire  South  American  nations,  whose  imports 
last  year  were  about  $1,000,000,000  our  share  of 
exports  to  them  was  only  14%,  and  a  large  per- 
centage of  the  imports  of  the  South  American 
countries  are  such  commodities  as  we  can  readily 
supply  and  that  we  are  now  supplying  to  Cen- 
tral America,  and  while  we  are  selling  approx- 
imately $325,000,000  to  Latin  America,  we  are 
buying  nearly  half  a  billion,  and  in  the  past  ten 
years  our  exports  to  these  countries  has  increased 
from  8%  to  13%,  while  our  imports  from  them 
have  doubled,  and  while  our  exports  to  Latin 
America  show  a  marked  increase,  the  share 
which  they  form  of  their  total  imports  has  not 
increased,  for  in  1905  these  countries  imported 
26.7%  from  the  United  States,  while  in  1909 
our  share  was  only  24%  and  in  1911  about  23%. 

The  analysis  of  the  trade  with  each  of  the 
[40] 


AN  AMERICAN  MERCHANT  MARINE 

nations  of  Latin  America  shows  conclusively 
that  in  those  sections  in  South  America  which 
are  more  distant  and  supplied  with  more  fre- 
quent opportunities  for  communication  with 
Europe  than  the  United  States,  the  share  which 
we  supply  is  much  smaller,  which  goes  to  prove 
that  in  order  to  increase  our  oversea  commerce, 
regular  and  rapid  means  of  communication  must 
be  provided  to  these  countries  and  this  communi- 
cation should  be  controlled  by  our  own  nation. 
To  illustrate  this  point:  The  Central  American 
states  imported  from  us  35%  to  75%  of  their 
total  imports,  while  Argentine,  Brazil,  Uruguay, 
and  Chile  averaged  only  about  12%  of  their 
imports  from  America.  Just  to  cite  an  exam- 
ple—  Germany,  of  all  the  European  nations, 
provides  the  best  means  of  communication  to 
Latin  America,  and  her  commerce  has  jumped 
from  $50,000,000  in  1901,  to  $161,000,000  in 
1911,  an  increase  of  222%;  those  of  the  United 
Kingdom  from  $i  16,000,000  to  $249,000,000,  an 
increase  of  1 1$%,  and  those  of  the  United  States 
from  $119,000,000  to  $274,000,000,  an  increase 
of  130%. 

A  few  facts  about  the  volume  of  our  exports 
to  seven  of  the  great  nations  now  engaged  in  war, 

[41] 


THE  NEED  OF  THE  HOUR 


during  the  fiscal  year  ending  June  30,  1914,  will, 
without  doubt,  be  of  interest  to  the  reader.  We 
exported  to 

Austria-Hungary  $  22,718,258 

Belgium 61,219,894 

France 159,818,924 

Germany 344,794,276 

Russia  in  Europe 30,088,643 

Servia   . . .  .* 9,462 

United  Kingdom 594,271,863 

These  exports  were  for  the  most  part  food 
stuffs  and  raw  materials. 

The  probabilities  are  that  there  will  be  a 
greatly  increased  demand  for  our  exports,  es- 
pecially our  food  exports,  in  fact,  this  demand 
is  already  upon  us  and  when  this  demand  comes 
with  its  full  force,  and  it  will  come  soon,  per- 
haps before  this  book  is  off  the  press,  we  must 
be  prepared  to  meet  it.  Now  then,  not  only  will 
we  be  expected  to  supply  these  nations  with  the 
vast  exports  that  we  sent  them  last  year,  which 
consisted  for  the  most  part  of  food  and  raw  ma- 
terials, but  because  of  the  fact  that  these  nations 
are  engaged  in  war  and  are  obliged  to  put  on  the 
battlefields  a  great  part  of  their  able-bodied  men 

[42] 


AN  AMERICAN  MERCHANT  MARINE 

who  previous  to  the  war  were  engaged  in  man- 
ufacturing pursuits,  who  is  to  supply  these  na- 
tions with  the  manufactured  goods  which  were 
formerly  supplied  by  their  home  market?  The 
United  States  is  the  only  nation  that  can  meet 
this  demand,  which  will  come  to  us  not  only  dur- 
ing the  war,  but  which  will  sweep  over  this 
country  as  soon  as  peace  is  declared,  for  it  will 
be  many  years  before  the  nations  engaged  in  war 
will  be  able  to  rehabilitate  their  plants,  so  com- 
pletely demoralized  are  they  even  at  this  writing. 
And  then  again,  merchant  ship  construction 
has  practically  ceased  abroad,  and  daily  reports 
come  to  us  of  the  sinking  of  foreign  merchant 
ships  and  the  destruction  of  every  ship  decreases 
by  that  amount  of  tonnage  the  world's  supply. 
Fortunately  up  to  this  writing  on  account  of 
England's  strong  position  as  practical  mistress 
of  the  seas  the  destruction  has  not  been  great,  but 
who  can  foretell  at  this  writing  at  what  moment 
a  large  part  of  the  merchant  ships  may  be  with- 
drawn or  destroyed,  and  then  who  and  what 
means  is  to  be  employed  to  carry  on  not  only  our 
own  commerce  but  the  commerce  of  the  world? 
And  is  this  great  nation,  so  strong  in  every  re- 
spect, to  sit  supinely  by  and  wait  with  quiet  com- 

[43] 


THE  NEED  OF  THE  HOUR 


posure,  and  I  might  say  with  complete  indiffer- 
ence, to  see  what  will  happen?  And  then  when 
it  happens,  shall  we  say,  "  Well,  it's  too  bad,  we 
ought  to  have  known  better,  but  who  could  have 
foreseen  this  result?  "  Or  shall  it  use  its  vast 
capital  and  abundant  resources,  its  skill  and 
energy,  and  immediately  set  out  to  do  something 
effective,  so  that  it  shall  not  be  a  laggard  and 
like  Nero,  fiddle  while  Rome  is  burning,  so 
that  before  the  smoke  of  this  great  war  has 
passed  away,  America  shall  say,  "  We  are  pre- 
pared to  take  care  not  only  of  your  sustenance 
but  of  our  own." 


[44] 


CHAPTER  V 

THE  FOREIGN  SHIP  POOL  OR  CONFERENCE,  AND  ITS 
EFFECT  ON  AMERICAN  OVERSEA  COMMERCE 

TT  is  perhaps  not  an  unknown  fact,  even  to  one 
entirely  unacquainted  with  the  meaning  of  the 
words  "  merchant  marine,"  that  a  shipping 
trust  exists,  and  that  this  trust  or  pool  is  unques- 
tionably the  most  powerful  commercial  organi- 
zation in  the  world.  Even  our  great  steel  trust 
is  but  a  pigmy  compared  with  this  giant 
octopus. 

In  order  to  bring  clearly  before  the  reader  the 
real  situation  that  existed  up  to  the  time  when 
war  was  declared,  I  will  briefly  outline  what 
transpired  before  an  investigation  committee, 
appointed  by  the  Sixty-third  Congress.  This  re- 
port, a  copy  of  which  can  be  secured  from  Wash- 
ington, upon  request,  is  known  as  the  "  Report  of 
the  Committee  on  the  Merchant  Marine  and 
Fisheries  on  Steamship  Agreements  and  Affilia- 
tions in  the  American,  Foreign  and  Domestic 
Trade,  under  House  Resolution  587."  It  shows 

[45] 


THE  NEED  OF  THE  HOUR 


plainly  that  this  trust  has  been  rather  a  hard 
taskmaster  and  unusually  severe  on  its  American 
subjects.  For  a  long  time  the  American  nation 
has  realized  that  the  world's  shipping  was  in  the 
hands  of  a  gigantic  combination,  that  United 
States  shippers  were  being  discriminated  against 
and  that  this  trust  was  so  powerful  and  its  agree- 
ments so  ironclad  that  it  was  made  practically 
impossible  for  any  new  competitor  to  enter  the 
field;  but  aware  as  it  was  of  these  facts,  it  was 
entirely  unprepared  for  the  revelations  dis- 
closed by  this  investigation.  Some  of  the  im- 
portant disclosures  I  will  here  present  and  I  be- 
lieve that  any  fair-minded  person  will  say  that 
in  the  face  of  all  this  our  nation  must  be  senile, 
if  that  expression  may  be  permitted,  to  allow 
such  an  unspeakable  condition  to  continue  under 
its  very  eyes.  It  is  true  the  nation  is  trying  to 
remedy  some  of  the  conditions  revealed  by  these 
disclosures,  a  suit  to  dissolve  the  trust  having 
been  recently  decided  in  the  New  York  District 
Court  against  the  government.  But  the  remedy 
lies  in  a  different  and  much  more  effective  pro- 
gram than  investigation,  suits  and  threats.  The 
almost  laughable  part  of  the  whole  situation  is, 
that  in  the  testimony  presented  one  of  the  reasons 

[46] 


AN  AMERICAN  MERCHANT  MARINE 

given  for  a  traffic  agreement  was,  that  a  pooling 
arrangement  was  found  necessary  to  preserve 
the  smaller  lines  against  annihilation  and  give 
every  line  a  fair  division  of  traffic.  And  so  it 
is  seen  that  the  millions  of  immigrants  who  ar- 
rive in  America  from  abroad  have  always  been 
parceled  out  to  various  steamship  lines,  although 
they  themselves  were  not  aware  that  these  trans- 
atlantic lines,  all  of  which  are  members  of  this 
pool,  were  sending  them  over  the  line  of  steam- 
ships that  they  desired  them  to  take. 

And  how  do  you  think  it  possible  for  this 
pool  to  dictate  to  you  upon  what  line  you  should 
travel?  Why,  by  the  simplest  possible  ex- 
pedient: it  touches  your  pocketbook!  For  if 
any  of  the  lines  were  carrying  more  than  the  per- 
centage of  steerage  passengers  (and  it  must  be 
borne  in  mind  that  the  first  class  passengers  are 
only,  in  amount,  less  than  10%  of  the  steerage, 
and  so  up  to  now  no  attention  has  been 
paid  to  this  particular  traffic)  the  line  is  forced 
to  raise  its  rates  until  its  traffic  falls  to  its  propor- 
tionate share  of  the  business  which  the  trust  has 
allotted  to  it.  A  report  is  made  weekly  to  the 
secretary  of  the  conference,  and  thus  "  tab  "  is 
kept  accurately  on  the  traffic  of  each  line. 

[471 


THE  NEED  OF  THE  HOUR 


Worst  of  all  was  the  testimony  of  Mr.  P.  A.  S. 
Franklin,  then  Vice  President  of  the  Inter- 
national Merchant  Marine  Co.  He  said 
frankly  that  the  spirit  of  the  agreement  was  not 
to  reduce  rates,  but  instead  to  have  any  line  ex- 
ceeding its  share  advance  its  rates  so  that  the 
other  lines  would  then  get  the  business  until  the 
agreed  balance  had  been  reached,  and  what  is 
even  worse,  at  the  end  of  a  specified  time  if  any 
lines  carried  more  than  the  agreed  number  of 
passengers,  those  lines  had  to  pay  to  the  con- 
ference a  certain  sum  per  excess  passenger,  which 
sum  was  divided  among  the  lines  that  were  less 
fortunate  —  a  great  incentive  to  improve  their 
service,  you  will  observe,  for  the  lines  which 
probably  by  reason  of  poor  service  did  not  get 
their  share,  and  all  those  lines  that  were  not 
well  patronized  said,  using  the  language  of  the 
street,  "  We  should  worry,"  or,  as  a  former  rail- 
road president  is  quoted  as  saying,  "  The  public 
be  damned! " 

So  that  the  enormity  of  the  offense  that  these 
steamship  companies  have  committed  may  be 
realized,  we  will  take  the  illustration  of  two 
railroads  traveling  between  the  same  points. 
One  is  equipped  with  every  convenience  for  the 

[48] 


AN  AMERICAN  MERCHANT  MARINE 

comfort  of  the  passengers.  The  other  railroad 
is  antiquated,  its  rolling  stock  is  not  kept  up,  its 
roadbed  is  uneven,  and  travel  on  this  road  is  not 
only  inconvenient,  but  undesirable  and  uncom- 
fortable. The  two  parallel  roads  then  enter 
into  an  agreement  whereby  the  road  that  is  car- 
rying most  of  the  traffic,  by  reason  of  the  fact 
that  its  equipment  is  up  to  date,  continues  to 
raise  its  rates  until  the  unfortunate  people  who 
cannot  afford  to  pay  the  increased  rate  are  forced 
to  accept  the  poorer  accommodations.  And 
then  what  happens?  If  the  rate  by  the  inferior 
road  gives  that  road  an  excess  of  passengers,  the 
better  road  loses  nothing  by  the  operation,  for 
the  inferior  road  pays  to  the  better  road  an 
amount  equal  to  the  number  of  passengers  which 
it  is  agreed  this  road  should  carry  and  even 
though  it  did  not  carry  the  passengers  it  would 
get  this  amount  of  money  just  the  same.  How 
long  would  this  government  permit  such  a  con- 
dition to  exist?  In  fact,  it  could  not  exist  under 
our  Interstate  Commerce  law,  which  was  en- 
acted with  a  view  of  taking  care  of  such  con- 
tingencies, so  that  each  railroad  must  keep  up 
its  service,  or  fall  by  the  wayside.  This  traffic 
in  human  freight  is  revolting  to  the  common 

[49] 


THE  NEED  OF  THE  HOUR 


sense  and  decency  of  our  people,  and  if  nothing 
is  ever  done  to  build  up  a  merchant  marine, 
measures  should  certainly  be  taken  to  eradicate 
this  evil  condition,  whereby  immigrants  are 
forced  to  accept  miserable  accommodations  be- 
cause the  trust  wants  to  let  the  companies  pro- 
vide such  accommodations  to  carry  a  large 
percentage  of  the  traffic. 

Until  about  three  years  ago  American  ship- 
pers were  without  any  regular  service  to  the 
west  coast  of  Africa,  although  England  and  Ger- 
many were  operating  an  efficient  service  from 
their  markets,  and  until  the  German  and  Eng- 
lish conference  decided  to  give  America  this 
service  American  shippers  were  dependent  upon 
tramp  or  sailing  vessels  to  reach  these  ports. 
Hence  on  account  of  having  practically  no  regu- 
lar steamship  communication  we  had  no  export 
business  there,  but  today  we  have  built  up  quite 
a  profitable  export  business.  But  now  the  na- 
tions are  at  war  and  our  communication  is 
interrupted  and  practically  stopped.  Do  Amer- 
icans want  to  be  placed  in  the  position  that  their 
export  business  can  be  interrupted  or  continued 
only  at  the  will  of  competing  countries? 

Although  the  conference  absolutely  regulates 
[50] 


AN  AMERICAN  MERCHANT  MARINE 

the  service  and  charges,  we  are  glad  to  pay  what- 
ever the  charges  may  be  rather  than  be  shut  out 
from  competing  with  European  countries  for  the 
trade  on  the  west  coast  of  Africa.  The  African 
exporter  also  is  always  at  the  mercy  of  this  pool, 
and  while  the  pooling  agreement  that  was  pre- 
sented to  Congress  distinctly  shows  that  rebates 
are  given  to  European  shippers,  no  mention  is 
made  of  any  rebate  to  American  shippers.  The 
pool  does  not  give  us  regular  communication  to 
the  north  coast  of  Africa,  and  hence  we  must 
wait  upon  it  before  trying  to  develop  a  foreign 
trade  with  that  portion  of  Africa. 

The  gist  of  the  matter  is  this,  that  we  commu- 
nicate with  foreign  nations  only  by  the  grace  of 
a  gigantic  ship  trust  or  conference,  and  when- 
ever for  any  reason,  war  or  otherwise,  this  com- 
munication is  discontinued  or  disturbed,  that 
portion  of  our  commerce  suffers  in  proportion 
to  the  disturbance.  Take  our  present  situation. 
The  nations  that  carry  most  of  the  oversea  com- 
merce are  locked  in  deadly  warfare.  At  this 
writing  England  and  France  control  the  seas, 
and  because  of  that  fact  our  commerce  is  inter- 
rupted only  to  the  extent  that  most  of  the  fast 
sailing  ships  between  America  and  Europe  have 


THE  NEED  OF  THE  HOUR 


been  withdrawn,  those  of  Germany  entirely,  and 
with  few  exceptions  only  the  smaller  vessels  of 
England  and  France  are  plying  between  Amer- 
ican and  European  ports.  What  if  the  situation 
changes  tomorrow,  and  Germany  should  decide 
that  she  wishes  to  put  her  merchant  fleet  back  on 
the  seas?  We  will  not  argue  as  to  whether  or 
not  she  will  be  successful.  Assume  that  she  de- 
cides to  undertake  the  enterprise:  That  very 
moment  the  merchant  ships  of  England  and 
France  and  Germany  would  be  withdrawn 
until  it  was  settled  which  nation  or  nations  would 
control  the  seas.  Whether  Germany  will  sit 
quietly  by  and  allow  her  ships  to  remain  bottled 
up,  as  they  are  at  present,  or  whether  she  will  go 
out  and  give  battle  to  the  English  and  French 
ships,  remains  to  be  seen,  but  the  fact  of  the 
matter  is  that  during  all  this  time,  this  great 
nation,  America,  with  its  four  and  a  quarter 
billions  of  oversea  commerce,  is  absolutely  de- 
pendent (except  for  eleven  steamships  which 
we  control,  and  except  for  the  129  small  ships 
which  have  recently  accepted  American  regis- 
try) upon  the  ability  of  England  and  France  to 
control  the  situation  on  the  high  seas.  Is  this  the 
spirit  of  the  American  nation  —  America,  the 

[52] 


AN  AMERICAN  MERCHANT  MARINE 

great  nation,  looking  forward  to  the  building  up 
of  magnificent  industrial  institutions  which  to- 
morrow might  be  swept  away  or  so  badly 
crippled  by  reason  of  its  oversea  commerce  being 
destroyed  that  it  would  take  years  to  recover 
from  the  blow?  It  is  true  that  our  government 
has  been  doing  its  utmost  to  remedy  our  present 
situation  since  the  war  began.  It  has  inquired 
first  of  all  whether  it  would  be  proper  for  us  to 
purchase  a  number  of  ships  owned  by  Germans, 
now  interned  in  American  waters.  It  also 
passed  a  statute  providing  for  the  registry  of 
ships  owned  by  Americans  under  the  American 
flag,  irrespective  of  age,  and  the  recent  but  un- 
successful attempt  of  the  Congress  of  the  United 
States  to  pass  the  Alexander  bill  were  all  meas- 
ures in  the  right  direction.  The  net  result  of 
all  this  has  been  the  addition  of  less  than  half  a 
million  tons  of  slow  or  second  class  ships  which 
have  accepted  registry  because  it  was  safer  for 
them  to  accept  it  and  sail  under  the  protection 
of  the  American  flag,  and  secondly  because  an 
opportunity  has  been  given  them,  by  reason  of 
the  war  and  the  withdrawal  of  the  big  ships, 
to  raise  the  freight  rates,  of  which  opportunity 

[53] 


THE  NEED  OF  THE  HOUR 


they  have  availed  themselves  very  handsomely, 
and  to  which  I  shall  refer  later. 

It  seems  incredible  —  and  it  is  impossible  to 
lay  too  much  emphasis  upon  this  point  —  that 
this  nation,  knowing  that  it  is  sitting  on  a  bomb 
which  at  any  moment  is  likely  to  explode  and 
smash  its  oversea  commerce  to  smithereens, 
nevertheless  simply  plays  with  fate  hoping,  al- 
though it  wants  to  be  neutral,  that  England  and 
France  will  continue  to  control  the  seas,  so  that 
Germany  cannot  get  out  and  destroy  any  of  the 
ships  and  thus  injure  or  perhaps  destroy  our  own 
oversea  commerce.  Self-preservation  is  the 
first  law  of  human  nature,  and  no  matter  how 
strictly  neutral  we  would  like  to  remain,  the  sym- 
pathy of  many  for  commercial  reasons  must  be 
with  England  and  France,  for  if  Germany 
should  attack  the  fleet  of  England  and  France,  it 
would  hardly  be  safe  for  us  to  send  cargoes  on  the 
ships  of  any  of  these  three  warring  nations,  even 
though  the  cargoes  were  insured.  We  would 
then  have  to  be  dependent  upon  the  small  num- 
ber of  boats  that  are  now  available. 

Why,  when  Egypt  wants  to  ship  goods  to  the 
United  States,  the  goods  must  be  transshipped 
at  Liverpool.  We  have  an  American  corpora- 

[54] 


AN  AMERICAN  MERCHANT  MARINE 

tion  known  as  the  United  States  &  Australasian 
Steamship  Company.  This  company  is  owned 
by  American  merchants  who  ship  extensively  to 
Australia.  It  is  a  combination  of  former  ship 
owners  who  found  it  more  convenient  to  com- 
bine and  join  the  trust  and  divide  the  shipping 
business  between  New  York  and  Australia.  So 
you  see  it  is  always  the  same  story  —  "  Join  the 
trust  or  we'll  break  you." 

One  can  realize  the  advantage  this  pool  has 
over  any  new  competitor,  when  it  is  understood 
that  any  loss  sustained  in  fighting  a  competitor 
is  divided  on  a  pro  rata  basis  between  the  parties 
to  the  pool,  and  so  when  a  fighting  ship  is  put  on, 
the  loss  is  divided,  and  it  does  not  take  long  for 
any  single  competitor  to  read  the  handwriting 
on  the  wall.  In  my  reading  of  the  report  I  can- 
not find  an  instance  where  steamers  plying  be- 
tween New  York  or  Frisco  to  any  foreign  ports 
are  not  in  the  hands  of  the  pool,  or  conference, 
and  their  agreements  filed  with  the  commission 
show  clearly  the  working  arrangements  of  each 
pool,  while  in  many  of  the  agreements  even  the 
amount  of  the  rebates  is  shown,  and  the  Com- 
mission also  has  the  letters  of  the  steamship  com- 
panies to  some  of  their  clients,  stating  what 

[55] 


THE  NEED  OF  THE  HOUR 


rebates  they  may  expect  if  they  confine  their 
shipments  to  the  trust  lines.  So  you  see  what 
chance  an  outside  steamship  line  would  have, 
coming  into  competition  with  the  trust.  Even 
a  tramp  steamer  has  no  chance  of  getting  a  cargo, 
for  the  reason  that  the  shipper  agrees  to  give  all 
his  business  to  the  trust  ships.  If  he  fails  to  do 
so,  he  forfeits  his  rebate.  In  some  cases  this 
rebate  amounts  to  $1.00  per  ton.  In  this  way 
competition  is  absolutely  stifled  and  consigners 
must  await  the  pleasure  of  the  trust.  However, 
when  no  rebates  are  allowed  and  tramp  steamers 
are  in  port  ready  for  business,  it  is  shown  that 
the  pool  rates  immediately  drop. 

The  Japanese  government  does  everything  it 
possibly  can  do  to  compel  the  Japanese  to  ship 
on  Japanese  bottoms.  This  is  a  fundamental 
principle  over  there  for  both  outgoing  and 
incoming  cargoes,  and  some  of  the  practices  re- 
sorted to,  to  bring  about  this  result,  are  explained 
by  former  Ambassador  Charles  Page  Bryan. 
Whether  the  Japanese  government  is  aware  of 
these  practices,  I  am  not  informed. 

The  experiences  of  the  Mississippi  Valley, 
South  American  &  Orient  Steamship  Company 
(Pan  American  Mail  Line)  gives  one  some  idea 

[56] 


AN  AMERICAN  MERCHANT  MARINE 

of  the  inner  workings  of  the  trust.  This  line 
began  its  service  between  New  Orleans  and 
South  America  in  1912,  and  although  its  vessels 
were  loaded  to  full  capacity  on  the  southbound 
voyage  not  a  pound  of  cargo  could  be  secured 
for  the  return  trip.  It  was  not  difficult  to  ac- 
count for  the  failure  to  obtain  a  return  cargo. 
The  conference  simply  notified  all  South  Amer- 
ican shippers  that  they  would  lose  their  rebates 
already  earned,  and  aside  from  that,  could  not 
obtain  ships  for  cargoes  to  Europe,  if  they  pat- 
ronized the  American  line,  and  even  though  the 
Pan  American  line  offered  almost  any  rates  for 
a  return  cargo  it  was  unable  to  get  one,  and  had 
to  return  in  ballast,  and  the  line  was  soon  aban- 
doned. One  can  readily  see,  therefore,  what 
will  happen  to  any  privately  owned  line  that 
attempts  to  compete  with  the  trust  lines. 

Most  of  the  shippers  of  any  importance  in 
South  America  have  connections  in  Europe  as 
well  as  the  United  States,  the  European  interests 
being  of  equal  importance.  For  this  reason  a 
line  of  independent  steamships  to  attempt  to 
compete  with  the  trust  must  operate  a  line  of 
steamers  simultaneously  between  the  United 
States  and  South  America,  and  South  America 

[57] 


THE  NEED  OF  THE  HOUR 


and  Europe,  or  it  cannot  get  any  business  in 
South  America  from  shippers  who  ship  to 
Europe  as  well.  Thus  one  can  realize  the 
great  amount  of  capital  private  ownership  would 
have  to  possess,  for  it  would  have  to  face  a  tre- 
mendous loss  while  it  was  getting  business  from 
the  trust,  for  the  rates  would  not  only  have  to  be 
lower,  but  its  sailings  would  have  to  be  at  least 
as  regular  and  its  ships  as  good,  and  even  with 
all  these  advantages  it  would  take  some  time 
to  convince  the  shippers  that  the  lines  would  be 
permanently  operated. 

Some  of  the  agents  of  the  trust  lines,  when 
asked  what  difference  there  was  in  the  rates  be- 
tween the  United  States  and  South  America 
and  Europe  and  South  America  stated  that  they 
kept  the  rates  the  same,  so  that  even  on  this  ad- 
mission (and  the  evidence  of  many  of  the  United 
States  shippers  disputes  that  statement)  the  dis- 
tance between  Europe  and  South  America  and 
the  United  States  and  South  America  is  much 
greater  and  the  rate  should  consequently  be 
higher  to  and  from  Europe,  and  now  on  the  west 
coast  of  South  America  where  the  difference  in 
distance  to  Europe  is  still  greater,  and  the 
United  States,  which  is  entitled  to  some  con- 

[58] 


AN  AMERICAN  MERCHANT  MARINE 

sideration  by  reason  of  its  great  expenditure  in 
building  the  Canal,  will  not  profit  by  it,  in  so 
far  as  cheaper  freight  rates  are  concerned,  for 
the  foreign  owned  ships  will  undoubtedly  main- 
tain the  same  rates,  if  they  do  not  give  besides  a 
rebate  to  European  shippers  as  a  reward  for 
going  after  the  South  American  trade. 

Mr.  H.  C.  Howard,  American  minister  to 
Peru,  reported  that  the  three  lines  carrying  the 
commerce  of  the  United  States  to  the  west  coast 
of  South  America  have  formed  agreements  re- 
garding passenger  and  freight  rates,  and  as  a  re- 
sult passenger  and  freight  rates  are  unusually 
high,  considering  the  poor  accommodations  fur- 
nished. One  of  the  agents  admitted  to  the  Con- 
gressional Committee,  that  a  rebate  of  about  10% 
was  given  to  the  United  States  Steel  Corporation. 
The  United  States  Steel  Corporation  is  given 
an  advantage  over  its  competitors  in  Amer- 
ica by  reason  of  the  fact  that  it  receives  a  rebate 
which  the  other  American  shippers  do  not  get. 
This  is  also  regarded  as  very  unamerican.  It 
might  be  a  significant  fact  to  note  in  this  con- 
nection that  the  United  States  Steel  Company 
operates  ships  and  if  it  did  not  get  a  concession 
from  the  trust  it  might  compete  with  it. 

[59] 


THE  NEED  OF  TPIE  HOUR 


Under  date  of  January  10,  1915,  the  Amer- 
ican consul  at  Port  Antonio,  Jamaica,  reported 
that  all  the  shipping  companies  carrying  freight 
between  Jamaica  and  American  and  British 
ports  agreed  upon  the  same  rates  between  the 
countries  —  very  gratuitous,  was  it  not?  when 
one  takes  into  consideration  that  the  distance  be- 
tween New  York  and  Jamaica  is  1,460  miles  and 
between  Jamaica  and  Liverpool  2,700  miles,  to 
say  nothing  of  the  better  ships  and  more  regular 
sailing  dates  to  and  from  the  British  ports.  The 
evidence  seems  to  indicate  that  whenever  a  com- 
petitor entered  the  field  of  the  trust  ships,  first 
its  strength  was  sized  up  and  if  it  appeared  that 
it  might  cut  rates  for  an  indefinite  period,  the 
business  was  divided  so  that  the  newcomer  re- 
ceived a  fair  share,  and  if  the  competitor  was  not 
strong  enough  the  fighting  ships  were  brought 
into  play  and  put  the  competitor  out  of  busi- 
ness. 

The  rebate  system  effectually  shut  out  all  com- 
petition if  other  means  proved  unavailing,  for 
the  agreement  for  rebates  specified  that  any  im- 
porter bringing  in  goods  from  any  other  com- 
pany than  the  trust  lines,  forfeits  all  rebates 
already  earned.  It  then  appears  from  the  re- 

r<5ol 


AN  AMERICAN  MERCHANT  MARINE 

ports  that  the  freight  rates  between  England  and 
Bermuda  are  the  same  as  those  from  New  York 
to  Bermuda,  about  one-third  of  the  distance. 
The  evidence  shows  that  a  combination  existed  to 
drive  New  York  out  of  the  West  Indian  trade, 
and  a  rate  was  made  by  a  combination  of  the 
railroad  and  steamship  lines  to  Canada,  whereby 
it  costs  10  cents  per  barrel  less  to  ship  from  On- 
tario to  the  West  Indies  than  from  New  York. 
Our  trade  with  Porto  Rico  has  grown  from 
less  than  $6,000,000  in  1900  to  over  $80,000,000 
in  1912,  and  the  United  States  controls  nearly 
90%  of  all  the  oversea  commerce  with  Porto 
Rico.  It  is  significant  to  note  that  during  most 
of  this  time  there  has  been  no  combination  be- 
tween the  steamship  companies,  and  rates  have 
been  cut  as  much  as  70%  in  an  effort  to  drive  a 
newcomer  out  of  business,  and  the  growth  of  our 
oversea  commerce  with  Porto  Rico  may  be 
traced  in  a  large  measure  to  the  low  freight  rates 
existing  for  the  greater  part  of  these  years  be- 
tween the  United  States  and  Porto  Rico.  The 
evidence  also  shows  conclusively  that  where  a 
combination  existed  rebates  were  given  accord- 
ing to  volume  of  business,  so  that  a  small  shipper 
trying  to  build  up  a  business  in  Porto  Rico  is  dis- 

f6il 


THE  NEED  OF  THE  HOUR 


criminated  against.  There  are  four  lines  of 
steamships  running  to  Porto  Rico.  They  have 
had  for  many  years  a  constant  succession  of  rate 
wars  and  are  now  engaged  in  a  competitive 
struggle.  There  were  eighty  steamship  agree- 
ments exhibited  to  Congress  and  the  agreements 
show  that  practically  every  foreign  trade  route 
to  and  from  American  ports  works  in  harmo- 
nious cooperation.  These  pools  usually  limit 
the  amount  of  freight  each  line  may  carry,  the 
number  and  time  of  sailing  and  the  rate  and 
rebates  that  are  to  be  given. 

Just  to  show  you  the  manipulation  of  freight 
rates  by  the  conference:  In  1910  cotton  was 
shipped  from  Galveston  to  Liverpool  for  22C  a 
100,  while  in  1913  the  rate  was  as  high  as  yoc, 
and  it  was  even  shown  in  the  investigation  that 
some  of  the  freight  rates  were  advanced  since 
1910  as  much  as  100%.  By  raising  the  rates  for 
flour  to  the  Balkan  ports  and  to  Scandinavian 
ports  this  pool  has  practically  eliminated  Amer- 
ican exports  of  flour  to  these  ports.  In  1913 
the  rate  from  New  York  to  Christiania  was  3ic 
a  100,  and  from  New  York  to  Wara  38c,  while 
the  rate  at  the  same  time  to  Rotterdam  was  2oc 
and  to  Liverpool  less  than  170,  and  on  account 

[62] 


AN  AMERICAN  MERCHANT  MARINE 

of  these  high  freight  rates  while  in  former  years 
America  shipped  large  quantities  of  flour  to  the 
Balkan  States  and  Scandinavia  today  only  when 
America  has  a  record  crop  and  can  offer  flour  at 
exceptionally  low  prices  can  it  ship  to  these 
ports,  and  the  German  and  English  mills  now 
control  the  regular  business  which  American 
mills  formerly  enjoyed  with  Scandinavia  and 
Finland.  In  plain  words,  the  Baltic  pool  lines, 
through  charging  exorbitant  and  prohibitive 
rates,  are  stopping  the  regular  business  of  Amer- 
ican mills  to  these  markets.  These  pool  com- 
panies feel  so  secure  in  their  position  that  they 
have  exhibited  some  of  their  agreements  to  the 
Congressional  Committee,  and  one  of  the  agree- 
ments shows  the  exact  percentage  of  steerage 
passenger  traffic  that  is  apportioned  to  each  line, 
the  minimum  rate  agreed  for  adult  passengers 
being  100  marks.  The  second  cabin  rates  are 
also  fixed  by  this  conference. 

Many  of  the  railroads  are  not  immune,  but 
are  part  of  the  trust.  These  conferences  have 
the  same  general  secretary  and  the  same  head- 
quarters at  Jena,  Germany.  Since  1912  the 
rates  have  advanced  from  Rega,  Russia,  to  the 
United  States,  on  flax  and  hemp  13%,  on  moist 

[63] 


THE  NEED  OF  THE  HOUR 


hides  26%,  on  dry  hides  54%,  and  on  rubber- 
waste  63%.  All  of  these  advances,  of  course, 
were  made  before  the  war. 

American  shipments  are  often  held  up  and 
foreign  shipments  given  the  preference.  This 
also  is  a  serious  handicap  to  our  American  ship- 
pers, for  it  makes  it  uncertain  as  to  the  time  their 
shipments  will  leave.  On  twenty-four  leading 
articles  exported  from  Naples  to  the  United 
States  the  average  increase  was  30%  and  from 
Florence,  Italy,  50  to  400%,  and  the  United 
States  importer  not  having  received  notice  of 
this  raise,  and  having  sold  his  importation  on  the 
basis  of  the  old  rates  naturally  lost  this  extra 
amount  of  money  that  he  had  to  pay  on  account 
of  the  raise,  and  therefore  the  United  States  im- 
porter is  always  placed  at  a  great  disadvantage, 
lor  it  is  impossible  for  him  to  figure  with  any 
degree  of  certainty  on  the  freight  rates. 

To  sum  it  all  up,  so  long  as  we  continue  to 
patronize  this  trust  we  only  increase  its  power, 
and  if  today  it  appears  impossible  to  get  capital 
of  sufficient  amount  to  start  a  line  of  American 
steamships  in  competition  with  the  trust,  how 
will  it  be,  if  by  reason  of  our  growing  business 
we  simply  increase  the  power  of  this  trust?  For 

[64] 


AN  AMERICAN  MERCHANT  MARINE 

every  ship  that  it  adds  to  its  fleet  makes  it  so 
much  more  difficult  for  a  competitor  to  compete, 
and  by  our  present  policy  of  inaction  we  make 
it  more  difficult  to  restore  the  American  flag  on 
the  high  seas.  Some  may  argue  that  this  war 
will  settle  the  trust.  Even  if  it  does  it  will  not 
settle  our  problem,  or  give  us  a  merchant 
marine.  But  I  want  to  make  a  prediction  at  this 
time,  that  the  war  will  not  only  NOT  settle  the 
trust,  but  immediately  upon  the  termination  of 
the  war,  all  the  money  that  the  members  of  the 
trust  lost  by  reason  of  the  inability  of  many  of 
the  ships  to  engage  in  commerce,  will  be  made 
up  in  a  very  short  time  by  the  highest  freight 
rates  ever  charged,  and  indirectly  this  nation 
will  pay  a  large  proportion  of  the  losses  of  the 
trust,  for  you  will  find  that  the  first  thing  that 
will  happen  when  hostilities  are  ended,  will  be 
the  calling  of  a  meeting  of  the  trust,  a  financial 
statement  will  be  made  by  each  member,  show- 
ing its  profits  before  and  during  the  war  and  the 
difference  will  immediately  be  added  to  freight 
rates,  and  we'll  pay  the  fiddler.  We  will  holler, 
of  course,  but  what  good  will  it  do  us?  Then 
we'll  threaten  to  start  an  independent  merchant 
marine,  and  in  the  end  we  will  wind  up  by  pay- 

[65] 


THE  NEED  OF  THE  HOUR 


ing  the  rates,  and  indirectly  every  consumer  in 
America  will  pay  his  proportion  of  the  Euro- 
pean war  tax,  unless  we  act  now  and  supply  our- 
selves with  the  weapons  of  protection,  which 
are  a  merchant  marine. 

Just  to  give  you  an  idea  how  this  country  is 
now  paying  a  portion  of  the  cost  of  the  war  in 
increased  freight  rates,  I  will  quote  from  a 
report  of  the  Secretaries  of  the  Treasury  and  of 
Commerce,  of  January  27,  1915.  A  concern  in 
San  Francisco  writes  that  since  the  war  broke 
out  rates  had  advanced  over  300%  and  within 
the  last  fifteen  days  another  100%,  and  that 
these  rates  were  made  without  notice  and  even 
previous  engagements  were  not  protected,  so 
that  a  shipper  was  actually  losing  money  on  a 
European  sale  when  at  the  time  the  sale  was 
made  he  had  figured  that  he  wras  making  a  small 
profit.  A  manufacturer  in  Texas  writes  that  for 
years  their  entire  output  had  been  sold  abroad, 
but  owing  to  present  prohibitive  rates  their 
plant  would  shut  down  until  such  rates  were 
established  that  would  permit  them  to  market 
their  output,  thus  throwing  that  many  more  men 
out  of  employment.  This  firm  also  added  that 

[66] 


AN  AMERICAN  MERCHANT  MARINE 

in  their  judgment  a  government  merchant  ma- 
rine would  solve  the  problem. 

The  president  of  a  leaf  tobacco  association 
wrote  that  notwithstanding  that  members  of 
his  organization  had  written  contracts  with  some 
of  the  steamship  companies  not  engaged  in  the 
war,  these  contracts  were  disregarded  and  a  raise 
of  rates  from  $3.50  per  hogshead  to  $7.50  was 
insisted  upon. 

A  Philadelphia  exporter  of  coal  writes  that 
the  shortage  of  vessels  is  so  serious  now  that  it 
is  practically  stopping  the  exportation  of  coal, 
and  that  they  now  have  several  orders  for  coal  to 
South  American  ports  and  it  is  impossible  to 
secure  vessels. 

A  New  York  manufacturer  of  cement  writes 
that  rates  have  advanced  so  rapidly  and  that 
ships  have  been  so  scarce  that  their  business  has 
been  practically  suspended. 

A  flour  miller  of  Seneca,  Mo.,  writes  that  he 
has  an  offer  of  some  orders  from  Barcelona, 
Spain,  but  that  the  steamship  companies  do  not 
care  to  carry  flour,  as  other  commodities  permit 
of  a  higher  rate,  but  quotes  a  rate  of  ^c  per  100 
Ibs.  as  against  i8c  before  the  war,  and  that  this 
high  rate  makes  the  shipment  prohibitive. 

[67] 


THE  NEED  OF  THE  HOUR 


A  ship  broker  of  New  York  says  that  it  is 
almost  impossible  to  get  tramp  steamers  for 
transatlantic  business,  although  he  has  offered 
over  three  times  the  rate  before  the  war. 

A  commission  merchant  of  New  York  pro- 
tested against  a  raise  of  280%  and  was  informed 
that  the  next  shipment  would  be  charged  at  a 
higher  rate. 

A  cotton  shipper  of  Atlanta,  Ga.,  says  the 
rate  from  Savannah  to  Rotterdam  and  Bremen 
was  increased  from  3^c  per  hundredweight  to 
as  high  as  $3.00,  almost  1000%,  or  a  difference 
of  from  $1.75  per  bale  to  $15.00  per  bale.  A 
lumber  concern  of  Kansas  City,  Mo.,  writes  that 
rates  have  advanced  over  300%,  and  they  have 
in  pile  at  port  a  little  over  9,000,000  feet,  all  of 
which  is  deteriorating,  and  could  be  disposed  of 
if  shipping  facilities  would  permit. 

I  have  just  quoted  a  few  complaints  taken 
from  about  75  letters  from  business  houses,  all 
along  the  same  line,  and  the  substance  of  all 
being  about  the  same.  Boiled  down,  the  situa- 
tion at  present  is  that  freight  rates  have  been 
advanced  to  an  unparalleled  extent  without 
regard  to  the  interests  of  American  trade.  High 
rates  are  not  only  restricting  the  general  volume 

[681 


AN  AMERICAN  MERCHANT  MARINE 

of  our  export  trade  but  are  actually  stopping 
exportations  in  some  lines.  Some  business 
plants  have  been  shut  down  as  a  result  of  the 
exorbitant  rates.  Shipowners  in  some  instances 
are  taking  only  those  goods  or  commodities 
which  will  pay  the  highest  freight  and  are  easily 
unloaded,  and  are  declining  to  accept  shipments 
of  other  commodities.  If  we  were  sure  we  had 
not  seen  the  worst,  we  might  readjust  our  export 
business  even  on  these  almost  prohibitive  rates, 
but  there  is  no  telling  where  these  rates  will 
jump  to  before  a  decline  sets  in,  and  we  who 
are  entirely  innocent  must  suffer  with  the 
others. 

So  that  my  readers  may  get  a  slight  concep- 
tion of  what  this  means  in  dollars  and  cents,  the 
per  cent  of  cost  of  freight  as  to  the  value  of  cargo 
based  on  rates  before  the  war,  on  the  December 
exports  would  have  been  5.63%,  or  in  dollars 
would  have  cost  our  farmers  and  business  men 
$12,723,800,  instead  of  which  it  cost  them  $30,- 
742,500,  which  means  a  loss  of  $18,018,700  on 
December  exports  alone.  Now  assume  the  ex- 
ports continue  for  one  year  on  this  same  basis, 
we  will  pay  to  shipowners,  principally  foreign, 
in  increased  freight  charges  on  our  exports  alone, 

[69] 


THE  NEED  OF  THE  HOUR 


$216,224,000.  Since  December  our  exports 
have  increased  very  largely  so  the  additional 
amount  we  are  obliged  to  pay  has  been  enor- 
mously increased.  What  does  the  shrewd,  far- 
seeing  American  business  man  say  to  this  propo- 
sition? And  then  when  the  rates  soar  higher 
what  will  the  loss  to  American  capital  be? 

Some  of  my  readers  will  argue  that  the  con- 
sumer pays  the  freight,  but  when  they  realize 
that  most  of  these  exports  are  grain  and  cotton, 
and  they  are  usually  sold  F.  O.  B.  point  of  des- 
tination and  after  the  commodity  is  sold  the 
rates  are  arbitrarily  advanced.  What  is  the 
shipper  to  do  but  pay  the  piper.  And  then  what 
of  the  freight  on  our  imports?  We  surely  must 
pay  that  as  well. 

This  proposition,  which  we  have  formerly  re- 
garded as  a  political  one  is  no  longer  so  —  it 
rests  with  the  business  men  of  the  country  as  to 
whether  or  not  America  is  to  have  a  merchant 
marine,  for  no  matter  who  pays  the  rates,  the 
shipper  could  probably  receive  that  much  more 
for  his  goods  if  the  rates  were  lower,  for  the  con- 
signor in  selling  must  take  into  consideration 
the  freight  rate  in  making  his  price,  for  there  is 
of  necessity  a  limit  that  the  purchaser  will  pay 

[70] 


AN  AMERICAN  MERCHANT  MARINE 

for  his  goods,  and  at  any  rate,  this  freight  rate, 
whether  paid  by  the  buyer  or  the  seller,  goes  to 
the  steamship  companies  who  unjustly  demand 
it  and  take  advantage  of  their  opportunity  to 
collect  it. 


CHAPTER  VI 

REASONS  WHY  PLANS  HERETOFORE  PROPOSED  FOR 

THE  BUILDING  UP  OF  A  MERCHANT  MARINE 

HAVE  FAILED:  A  SUGGESTION  FOR  THE 

ESTABLISHMENT  OF  A  MERCHANT 

MARINE 

TT  is  hoped  that  in  the  preceding  pages  suffi- 
cient  data  have  been  given  to  place  the  mind 
of  the  reader  in  a  receptive  attitude,  so  that  he 
may  decide  for  himself  whether  in  view  of  all 
the  facts  the  plans  now  to  be  submitted  for  the 
building  up  of  a  merchant  marine  are  feasible 
and  practical,  and  whether  the  reasons  suggested 
why  America  has  never  been  successful  in 
rehabilitating  her  once  great  merchant  marine 
are  logical  and  sound. 

We  will  first  consider  the  various  plans 
already  submitted  and  the  reasons  why  they  have 
met  with  failure,  analyzing  them  section  by 
section. 

First.  The  Discriminating  or  Discount  Duty 
Plan.  This  plan  has  been  advocated  for  the 

[72] 


AN  AMERICAN  MERCHANT  MARINE 

past  quarter  of  a  century,  and  its  adherents  have 
always  claimed  that  the  upbuilding  of  our  great 
merchant  marine  a  hundred  years  ago  was  due 
to  this  plan  and  that  if  the  Civil  War  had  not 
interrupted  our  progress  we  would  still  be  the 
greatest  shipping  nation  in  the  world.  This 
plan  provided,  first  of  all,  by  legislation  enacted 
into  law  in  1789,  that  a  discount  of  10%  on  all 
duties  be  imposed  on  imports  in  vessels  wholly 
the  property  of  a  citizen  or  citizens  of  the 
United  States.  It  was  superseded  in  1790  by  a 
law,  which  besides  allowing  a  discount  of  10% 
under  the  conditions  above  noted,  added  also  an 
extra  duty  of  10%  on  all  goods  imported  into  this 
country  on  foreign  bottoms,  so  that  an  American 
importer,  if  he  imported  on  an  American  bot- 
tom, would  receive  a  discount  of  10%,  but  if  he 
did  not,  he  not  only  would  lose  this  10%,  but 
would  be  assessed  an  additional  duty  of  10%  on 
the  duties.  This  law  continued  in  effect  until 
1815,  and  there  is  no  denying  the  fact  that  from 
1790  to  1815,  when  the  law  was  again  amended, 
our  oversea  commerce  made  wonderful  growth. 
In  1810  we  were  carrying  90%  of  our  oversea 
commerce  on  our  own  bottoms,  as  well  as  much 
of  the  commerce  of  foreign  nations.  By  the 

[73] 


THE  NEED  OF  THE  HOUR 


amendment  of  1815,  the  President  was  author- 
ized to  exempt  from  additional  duty,  imports 
into  the  United  States  from  foreign  countries  in 
vessels  belonging  to  those  countries,  provided 
that  said  countries  admitted  imports  from  the 
United  States  in  American  vessels  on  terms  of 
equality  with  similar  imports  on  their  vessels. 
This  was  practically  a  reciprocal  treaty,  and 
this  action  was  taken  because  foreign  nations 
were  beginning  to  object  to  our  adding  10%  to 
the  duties  on  imports  on  foreign  bottoms  and 
were  threatening  to  retaliate  on  imports  in  their 
countries  on  our  bottoms.  Now  in  the  early 
part  of  the  nineteenth  century  the  Napoleonic 
wars  were  being  waged,  and  these  wars  utterly 
demoralized  European  commerce,  especially 
between  England  and  France.  These  nations 
were  obliged  to  withdraw  their  ships  from 
engaging  in  oversea  commerce.  This  was 
America's  great  opportunity,  and  well  did  she 
take  advantage  of  it,  for  the  brilliant  growth 
of  her  merchant  marine  speaks  splendidly  and 
eloquently  of  her  success.  From  the  Napo- 
leonic era  down  to  1856  America  became  ruler 
of  the  seas,  and  not  only  was  her  own  commerce 
fostered  with  gratifying  results,  but  she  carried 

[74] 


AN  AMERICAN  MERCHANT  MARINE 

a  great  part  of  the  commerce  of  the  world,  and 
her  tonnage  engaged  in  foreign  trade  increased 
from  765,000  tons  in  1821,  to  1,631,000  in  1841, 
and  to  over  5,000,000  in  1861,  and  during  those 
same  periods  the  foreign  carrying  trade  of  the 
United  States  carried  on  American  bottoms, 
jumped  from  $113,000,000  in  1821,  to  $208,000,- 
ooo  in  1841,  and  up  to  over  $500,000,000  in  1857, 
from  which  point  it  rapidly  declined,  and  when 
you  realize  that  this  $500,000,000  in  1857  repre- 
sented over  70%  of  our  foreign  commerce,  while 
twenty  years  earlier  we  carried  over  80%,  you 
will  see  that  while  the  value  of  merchandise  car- 
ried in  American  vessels  engaged  in  the  foreign 
trade  increased  150%  from  1841  to  1857,  st^ 
the  per  cent  carried  in  American  vessels  de- 
creased from  83%  to  70%,  and  from  1856  to 
1857  tne  decline  was  5%.  Thus  it  will  be  noted 
that  the  decline  set  in  during  this  period,  which 
long  preceded  the  Civil  War. 

Now  in  1824  tne  ^aw  °f  l$l$  was  again 
amended,  and  provided  that  the  additional  duty 
of  10%  should  not  apply  to  foreign  ships  or 
vessels  entitled  by  treaty  or  by  any  act  of  Con- 
gress to  be  admitted  upon  payment  of  the  same 
duty  applied  to  imports  in  ships  or  vessels  of  the 

[75] 


THE  NEED  OF  THE  HOUR 


United  States,  with  the  exception  that  the  addi- 
tional duty  was  changed  in  1861  from  10%  of 
the  ordinary  duties  to  10%  ad  valorem.  This 
has  been  explained  in  a  preceding  chapter,  but 
is  repeated  here,  so  that  my  readers  may  better 
follow  the  subject. 

Now  in  1913,  Congress  in  the  tariff  act  of 
that  year  provided  that  "  a  discriminating  duty 
of  ten  per  cent  ad  valorem  in  addition  to  the 
duties  imposed  by  law  shall  be  levied,  collected 
and  paid  on  all  goods,  wares  or  merchandise 
which  shall  be  imported  in  vessels  not  of  the 
United  States  or  which  being  the  production  or 
manufacture  of  any  foreign  country  not  con- 
tiguous to  the  United  States  shall  come  into  the 
United  States  from  such  contiguous  country,  but 
this  discriminating  duty  shall  not  apply  to  wares 
or  merchandise  which  shall  be  imported  on 
vessels  not  of  the  United  States  entitled  at  the 
time  of  such  importation  by  treaty  or  convention 
or  act  of  Congress  to  be  entered  in  the  ports  of 
the  United  States  on  payment  of  the  same  duties 
as  shall  then  be  payable  on  goods,  wares  or  mer- 
chandise imported  in  vessels  of  the  United 
States,  nor  to  such  foreign  products  or  manu- 
factures as  shall  be  imported  from  such  con- 

[76] 


AN  AMERICAN  MERCHANT  MARINE 

tiguous  countries  in  the  usual  course  of  strictly 
retail  trade."  And  further  in  this  same  act  it 
provides  that  "  a  discount  of  5%  on  all  duties 
imposed  by  this  act  shall  be  allowed  on  such 
goods,  wares  and  merchandise  as  shall  be  im- 
ported in  vessels  admitted  to  registration  under 
the  laws  of  the  United  States.  Provided  that 
nothing  in  this  subsection  shall  be  so  construed 
as  to  abrogate  or  in  any  manner  impair  or  affect 
the  provisions  of  any  treaty  concluded  between 
the  United  States  and  any  foreign  nation." 

The  addition  of  the  provision  in  respect  to 
imports  from  contiguous  countries  first  appeared 
in  the  tariff  act  of  1897. 

This  is  the  history  of  the  legislation  with  refer- 
ence to  an  additional  or  discriminating  duty  and 
a  discount  duty.  But  all  of  these  provisions 
contain  a  clause  that  if  in  conflict  with  treaties 
or  agreements  with  nations,  these  clauses  become 
void  with  reference  to  such  countries,  and  inas- 
much as  we  have  some  thirty-odd  treaties  with 
the  leading  nations  of  the  world  and  they  prac- 
tically embrace  all  countries  from  whom  we 
import,  in  order  to  make  this  law  of  any  effect 
we  would,  of  course,  be  obliged  first  to  notify 
these  countries  that  we  intended  to  abrogate 

[77] 


THE  NEED  OF  THE  HOUR 


these  treaties  with  them,  and  one  year's  notice 
must  be  given.  In  this  same  tariff  bill  there  is 
a  clause  authorizing  and  empowering  the 
President  of  the  United  States  to  negotiate  trade 
agreements  with  foreign  nations  wherein  mutual 
concessions  are  made  looking  toward  free  trade 
relations  and  further  reciprocal  expansion  of 
trade  and  commerce. 

Now,  does  it  not  appear  absurd  to  even  think 
of  first  asking  the  President  to  negotiate  trade 
agreements  for  a  freer  exchange  of  commerce, 
and  then  in  the  same  breath  ask  him  to  give 
notice  to  those  nations  with  whom  we  already 
have  free  trade  relations  that  we  intend  to  abro- 
gate those  trade  relations?  Such  a  plan  appears 
too  ridiculous  even  to  discuss  for  a  single  instant. 
So  you  see  all  this  talk  about  establishing  a  mer- 
chant marine  by  a  discriminating  or  discount 
duty  plan  is  a  farce  pure  and  simple,  for  the  law 
has  now  been  in  force  over  a  year,  and  not  a 
ship  has  been  added  to  our  fleet  on  that  account, 
for  not  a  single  discount  has  been  allowed,  nor 
has  a  single  discriminating  duty  been  added  to  a 
shipment  received  on  a  foreign  bottom,  as  the 
Attorney  General  of  the  United  States  has  ruled 


AN  AMERICAN  MERCHANT  MARINE 

that  that  part  of  the  tariff  law  of  1913  is  uncon- 
stitutional because  it  violates  treaty  rights. 

A  very  recent  decision  of  the  United  States 
Customs  Court  of  Appeals  holds  that  whatever 
discount  is  allowed  on  goods  imported  on  Ameri- 
can vessels  must  be  allowed  on  all  goods  received 
on  foreign  bottoms,  where  reciprocal  treaties 
exist,  and  except  with  France  we  have  such 
reciprocal  treaties. 

In  1872  the  government  of  France  conceived 
the  same  idea,  that  it  could  build  up  its  merchant 
marine  by  placing  an  additional  tax  on  goods 
received  by  French  importers  on  bottoms  other 
than  those  of  France,  but  in  1873  the  law  was 
repealed,  for  other  nations  threatened  reprisals 
if  this  action  was  not  taken,  and  that  is  exactly 
what  would  happen  in  this  country  if  we 
attempted  to  abrogate  all  our  treaties  with 
foreign  nations  and  enacted  into  law  a  discrim- 
inating or  discount  duty,  or  both. 

Now  assume  that  we  did  this,  what  would 
happen?  First  of  all,  there  are  other  impor- 
tant treaty  rights  contained  in  most  of  the 
treaties  with  other  nations,  and  we  have  received 
valuable  concessions  in  some  of  them,  and  we 
would  not  find  it  so  easy  to  renegotiate  new 

[79] 


THE  NEED  OF  THE  HOUR 


treaties  on  as  favorable  terms,  for  the  nations 
would  know  why  we  abrogated  these  treaties. 

Then  again,  compare  the  situation  of  to-day 
with  that  of  a  hundred  years  ago,  when  the  dis- 
criminating duty  was  in  effect.  Our  manufac- 
tures were  in  their  infancy,  and  except  for  the 
food  stuffs  our  exports  were  but  meager.  Dur- 
ing the  last  fiscal  year  there  was  a  balance  in  our 
favor  of  exports  over  imports  of  over  $600,000,- 
ooo,  our  exports  of  iron  and  steel  manufactures 
having  grown  in  the  last  hundred  years  from 
nothing,  in  fact,  (for  until  1850  we  exported 
practically  no  iron  or  steel  manufactures)  to 
over  $300,000,000  in  1913. 

Now  assume  for  a  moment  that  a  discriminat- 
ing duty  of  10%  was  added  to  all  duties  on 
imports  received  on  foreign  bottoms.  Our 
imports  of  goods  on  the  free  list  have  steadily 
increased,  and  last  year  we  imported  not  quite 
a  billion  dollars  of  our  $1,800,000,000  of  mer- 
chandise free  of  duty.  Now  how  would  it  do  to 
tax  this  $1,000,000,000,  practically  all  of  which 
came  in  on  foreign  bottoms,  with  10%  discrim- 
inating duty,  which  duty  as  well  as  the  profit 
would  be  added  to  the  cost  to  the  consumer  and 
which  means  from  $100,000,000  to  $150,000*000 

[80] 


AN  AMERICAN  MERCHANT  MARINE 

added  to  the  cost  of  living?  I  hardly  think  our 
nation  would  "  stand  for  "  this  tax  very  long, 
for  the  free  list  is  being  gradually  extended  and 
from  some  of  the  nations  with  whom  we  trade 
practically  all  of  our  importations  are  items 
now  on  the  free  list,  so  if  the  free  list  items  were 
excluded  from  the  discriminating  duty  tax,  there 
would  be  so  little  left  to  tax,  that  no  one  can 
seriously  think  that  such  action  on  the  part  of 
our  government  would  ever  build  up  a  merchant 
marine. 

Now  suppose  that  notwithstanding  all  these 
facts,  we  still  decided  to  abrogate  our  treaties 
and  renegotiate  new  ones,  eliminating  that  por- 
tion that  prohibited  a  discriminating  duty  and 
making  the  additional  duty  lawful.  Imme- 
diately upon  these  treaties  going  into  effect  we 
would  unquestionably  find  that  all  foreign 
nations  with  whom  we  had  commercial  relations 
would  adopt  the  same  plan  against  us,  and 
every  dollar  we  exported, —  and  our  exports  are 
vastly  in  excess  of  our  imports, —  would  be  taxed 
10%  additional  duty,  if  exported  into  foreign 
countries  on  American  bottoms.  Do  you  think 
any  sane  merchant  in  these  foreign  countries 
would  import  on  an  American  bottom  and  pay 

[81] 


THE  NEED  OF  THE  HOUR 


10%  additional  for  his  goods,  when  he  could 
import  on  a  bottom  without  paying  this  addi- 
tional duty?  And  then,  what  would  be  the 
result?  It  is  very  plainly  to  be  seen  that  our 
ships  might  carry  full  cargoes  to  America,  but 
how  would  they  go  back  to  foreign  countries? 
Why,  in  ballast,  of  course.  And  how  long 
would  a  merchant  marine  survive,  if  it  carried  a 
full  cargo  one  way  and  returned  in  ballast? 
The  plan,  if  attempted,  would  simply  mean  that 
this  government  would  be  willing  to  commit 
commercial  suicide.  Better  a  thousand  times 
that  we  never  own  a  single  merchant  ship,  than 
that  we  attempt  such  a  plan  as  proposed  by  dis- 
count duty  adherents.  I  do  not  even  admit  that 
our  merchant  marine  was  built  up  through  the 
operation  of  this  plan.  The  Napoleonic  wars 
were  unquestionably  responsible  for  the  up- 
building of  our  merchant  marine,  as  I  have 
stated  before,  and  it  received  such  an  impetus 
that  at  the  close  of  the  war  it  was  impossible  for 
foreign  countries  to  overtake  us,  until  the  era  of 
iron  ships  came  in,  and  then,  as  we  were 
unfamiliar  with  iron  manufacturers  at  that  time, 
and  England  with  her  great  advantages  in  this 
respect  began  to  build  her  ships  of  iron, —  and 


AN  AMERICAN  MERCHANT  MARINE 

her  ships  were  faster  and  more  substantial, —  our 
decline  set  in,  for  as  England  increased  her  mer- 
chant marine,  our  nation  lost  correspondingly. 
Then  came  the  unfortunate  Civil  War,  and 
although  we  had  been  losing  ground  rapidly  for 
five  years  prior  to  that  time,  still  it  just  needed 
the  war  to  set  us  back,  even  as  the  Napoleonic 
wars  set  England  and  France  back,  and  we  have 
never  recovered  from  that  setback  since.  But 
our  indifference  during  the  past  twenty-five 
years  had  a  great  deal  to  do  with  it.  Without 
touching  upon  that  phase  of  the  matter  now, 
suffice  it  to  say  that  we  hardly  think  one  will  find 
any  person  who  has  given  the  subject  much  study 
and  is  at  all  familiar  with  the  facts  as  above  pre- 
sented, who  believes  that  our  merchant  marine 
can  be  rehabilitated  by  the  discriminating  or  dis- 
count duty  plan. 

Second.  The  next  plan  to  be  considered  is 
what  is  known  as  the  Free  Ship  plan.  Its 
adherents  believe  that  if  the  United  States  will 
permit  Americans  to  purchase  ships  wherever 
they  please  and  bring  them  into  America  free  of 
duty,  many  Americans  would  undertake  the 
operation  of  merchant  ships.  Now  this  plan 
received  a  free  and  full  discussion  before  a  Com- 

[83] 


THE  NEED  OF  THE  HOUR 


mission  appointed  by  the  Congress  of  the  United 
States  in  1902,  known  as  the  Merchant  Marine 
Commission,  and  when  persons  whom  it  was 
thought  this  plan  would  interest,  were  asked  if 
they  would  operate  under  this  plan,  if  such  a  law 
were  passed,  they  replied  that  they  could  not, 
because  ship  inspection  and  maritime  laws,  com- 
bined with  the  added  cost  of  labor  on  American 
ships  as  against  foreign  ships,  would  make  it 
impossible  for  them  to  operate  profitably  against 
this  competition,  and  anyone  who  has  studied 
the  table  of  wages  on  foreign  and  American 
ships  will  be  speedily  convinced  of  the  utter  use- 
lessness  of  attempting  to  build  up  a  merchant 
marine  on  any  such  plan. 

Now  since  the  commencement  of  the  present 
war,  the  government  found  our  country  in  a  des- 
perate condition  by  reason  of  the  withdrawal  of 
so  many  ships  that  were  formerly  carrying  our 
commerce,  and  so  a  temporary  measure  was 
enacted  which  permits  the  President,  so  long  as 
he  deems  it  necessary,  to  permit  foreign  built 
ships  owned  by  Americans,  to  register  under 
the  American  flag,  and  the  President  is  also 
authorized  to  suspend  the  inspection  and  other 
maritime  regulations  which  were  objectionable. 


AN  AMERICAN  MERCHANT  MARINE 

At  this  moment  then  we  have  even  a  much 
broader  free  ship  plan  than  was  ever  dreamed  of 
by  the  free  ship  adherents.  And  what  has  hap- 
pened? First  of  all,  these  foreign  ships  coming 
under  American  registry,  are  protected  by  the 
American  flag,  and  this  reason  alone,  it  would 
seem,  would  be  sufficient  to  impel  these  ships 
to  seek  protection  under  our  flag  in  order  that 
their  commerce  might  be  safely  carried  on. 
And  again,  no  restrictions  were  made  by  our 
government  as  to  charges ;  but  notwithstanding 
all  this  freedom  and  all  the  advantages  of  regis- 
try under  the  American  flag  at  this  time,  and  not- 
withstanding that  those  ships  which  have 
accepted  American  registry  have  advanced  their 
former  freight  rates  without  sufficient  justi- 
fication, up  to  1000% — nevertheless  only  129 
ships  have  accepted  American  registry,  with  a 
gross  tonnage  of  not  quite  475,000. 

Now  if  that  is  all  the  tonnage  we  get  under 
these  most  favorable  conditions,  when  these  lines 
have  practically  no  competition  and  not  a  single 
restriction,  what  would  be  the  result  of  a  free 
ship  plan,  under  ordinary  conditions  when  the 
sea  is  safe  for  ships  of  all  nations?  I  predict 
now,  that  within  ninety  days  after  the  close  of 

[85]  " 


THE  NEED  OF  THE  HOUR 


the  war  and  the  resumption  of  the  regular  lines 
of  steamers,  nearly  all  of  this  tonnage  that  has 
come  under  free  registry  will  go  back  to  its 
former  flag,  and  my  main  reason  for  making  this 
prediction  is,  that  the  shipping  trust  will  bring 
its  gentle  influence  to  bear  upon  it,  and  as  this 
influence  for  many  years  past  has  seemed  to 
accomplish  whatever  it  desired  of  the  various 
shipowners,  it  is  safe  to  say  it  will  have  little 
difficulty  in  bringing  these  lines  back  to  their 
former  close  relations  with  the  trust. 

So  you  see  that  this  makeshift  legislation, 
which  I  am  not  criticizing  and  which  I  think 
was  necessary  during  the  war,  will  avail  us  noth- 
ing toward  attaining  the  desired  end,  and  in  all 
probability  soon  after  the  close  of  the  war  we 
will  again  be  face  to  face  with  the  same  problem, 
but  we  will  at  least  have  accomplished  one  bene- 
ficial result,  for  we  will  have  demonstrated  once 
for  all  that  a  merchant  marine  cannot  be  built 
up  by  a  free  ship  plan. 

There  is  still  another  phase  of  the  situation 
that  I  have  not  touched  upon,  and  that  is  the 
attitude  of  organized  labor.  Does  any  one  who 
has  watched  organized  labor  during  recent  years, 
think  for  a  moment  that  it  will  sit  idly  by 

[861 


AN  AMERICAN  MERCHANT  MARINE 

and  permit  the  ship  owners  to  employ  foreign 
seamen  on  the  steamers?  It  will  be  but  a  short 
time  before  the  legislators  in  Washington  will 
conceive  the  idea  that  it  might  be  a  good  plan 
to  pass  legislation  prohibiting  foreign  seamen 
on  American  ships,  and  then  "  where  will  we  be 
at? "  How  long  do  you  think  it  would  be 
before  these  ships  would  go  back  to  foreign  regis- 
try, in  order  to  get  the  benefit  of  lower  wages? 
For  they  will  claim  that  they  cannot  compete 
with  foreign  ships  paying  a  lower  wage  scale, 
and  we  cannot,  of  course,  compel  foreign  ship 
owners  to  make  their  scale  of  wages  in  keeping 
with  ours.  So  there  again  we  may  encounter 
difficulties. 

It  must  also  be  borne  in  mind  that  this  free 
ship  law  just  passed  does  not  compel  the  owners 
of  these  ships  to  permit  the  United  States  to  take 
them  in  case  of  war,  so  that  it  gives  the  United 
States  no  auxiliaries  in  the  event  it  should  need 
them,  and  one  of  the  important  reasons  for  a 
merchant  marine  is  that  the  government  should 
be  able  to  impress  into  its  navy  these  merchant 
ships  in  case  of  war. 

Third.  The  next  to  be  considered  is  the  Ship 
Subsidy  plan.  This,  too,  is  one  that  has  many 

[87] 


THE  NEED  OF  THE  HOUR 


advocates.  In  fact,  because  it  has  proven  suc- 
cessful in  foreign  lands,  many  believe  that  we 
would  meet  with  the  same  measure  of  success 
under  its  operation.  This  plan  simply  provides 
that  a  bounty  be  given  by  our  government  to 
Americans  who  will  build  and  operate  ships 
under  our  flag  in  oversea  commerce.  Strange  as 
it  may  seem,  the  nation  with  the  greatest  mer- 
chant marine,  in  fact  the  nation  whose  oversea 
tonnage  is  greater  than  that  of  all  the  nations 
combined, — England — gives  practically  no  ship 
subsidy,  and  has  given  practically  none  for  many 
years.  She  gives  a  small  sum  for  the  use  of  ships 
that  can  be  utilized  as  armored  cruisers  in  case  of 
war,  and  she  also  pays  for  the  carriage  of  her 
mail.  Our  government  pays  for  the  carriage  of 
our  mail,  and  we  have  ships  subsidized  for  that 
purpose  on  both  the  Atlantic  and  the  Pacific.  It 
may  seem  strange,  but  nevertheless  it  is  true,  that 
although  our  ships  are  subsidized  for  the  carry- 
ing of  mails,  they  are  members  of  the  ship  trust, 
so  you  can  see  that  subsidizing  ships  does  not 
prevent  their  joining  the  pool,  for  they  are 
obliged  to  do  it  in  self-defense,  or  they  will  not 
get  cargoes,  and  if  to-day  we  attempted  to  build 
up  a  merchant  marine  through  a  ship  subsidy, 

[88] 


AN  AMERICAN  MERCHANT  MARINE 

unless  these  ships  joined  the  pool  they  would 
soon  be  driven  off  the  high  seas,  or  would  come 
back  to  our  government  for  an  increase  of  sub- 
sidy, and  we  would  never  know  whether  we  had 
an  American  merchant  marine  or  not.  There 
have  been  several  cases  where  steamers,  although 
subsidized  by  our  government,  could  not  go  out, 
because  they  could  get  no  freight.  The  Ham- 
burg-American Line,  the  greatest  steamship  line 
of  all,  receives  no  subsidies  from  the  government 
of  Germany. 

This  plan  has  been  before  the  country  more 
prominently  than  any  other,  and  bill  after  bill 
has  been  introduced  in  Congress,  but  they  have 
always  failed  of  passage,  and  if  a  bill  could  not 
pass  a  Republican  Congress,  what  chance  would 
it  have  of  passing  in  a  Democratic  Congress? 
For  it  is  a  form  of  paternalism,  and  Democratic 
policy  is  against  paternalism.  Aside  from  this 
fact,  unless  the  government  offered  enormous 
subsidies,  or  offered  subsidies  and  free  registry 
and  practically  unrestricted  employment  and 
maritime  regulations,  it  would  not  succeed  in 
getting  capital  to  embark  in  the  shipping  busi- 
ness in  competition  with  the  trust.  Recently 
Mr.  B.  N.  Baker,  of  Baltimore,  one  of  the  ablest 

[89] 


THE  NEED  OF  THE  HOUR 


and  most  experienced  authorities  on  the  mer- 
chant marine,  attempted  to  raise  $15,000,000  to 
build  ships  to  go  through  the  Canal,  but  so 
powerful  is  the  shipping  trust  that  Mr.  Baker 
found  it  impossible  to  raise  the  money.  One  is 
convinced  that  we  are  wasting  time  if  we  wait 
for  the  Congress  to  pass  a  ship  subsidy  bill. 
Then  take  this  plank  of  the  Democratic  plat- 
form into  consideration  (and  we  must  assume 
that  the  people,  when  they  elected  the  Demo- 
cratic party  to  power,  understood  what  its  plat- 
form was)  :  It  says,  "  We  believe  in  fostering 
by  constitutional  regulation  of  commerce  the 
growth  of  the  Merchant  Marine,  which  shall 
develop  and  strengthen  the  commercial  ties 
which  bind  us  to  our  sister  republics  of  the 
South,  but  without  imposing  additional  burdens 
upon  the  people  and  without  bounties  or  subsi- 
dies from  the  public  treasury."  It  seems  to  me 
that  the  language  of  this  plank  is  very  clear  and 
surely  no  subsidy  bill  could  be  passed  during 
this  administration. 

Fourth.  Government  —  Partially  owned  and 
operated  Steamship  Plan.  Other  plans  pre- 
sented to  Congress  are  quasi-government  owned 
or  government  controlled  ships  or  vessels,  and 

[90] 


AN  AMERICAN  MERCHANT  MARINE 

the  Alexander  bill,  now  before  Congress,  and 
which  seems  to  have  the  approval  of  a  large 
number  of  the  members,  provides  that  "  the 
United  States,  acting  through  a  shipping  board, 
may  subscribe  to  the  capital  stock  of  any  cor- 
poration now  or  hereafter  organized  under  the 
laws  of  the  United  States  or  of  any  state  thereof, 
or  of  the  District  of  Columbia,  upon  the  terms 
and  conditions  herein  mentioned.  The  object  of 
this  corporation  is  to  purchase,  construct,  equip, 
maintain  and  operate  merchant  vessels  in  the 
trade  between  the  Atlantic  Gulf  or  Pacific  ports 
of  the  United  States  and  the  ports  of  Central 
and  South  America  and  elsewhere,  to  meet  the 
requirements  of  the  foreign  commerce  of  the 
United  States.  The  initial  capital  stock  of  such 
corporation  shall  not  be  over  $10,000,000  of  the 
par  value  of  $100  per  share,  but  the  shipping 
board  with  the  approval  of  the  President  may 
consent  to,  or  cause  an  increase  of  the  capital 
stock  from  time  to  time  as  the  interests  of  the 
corporation  may  require."  It  provides  that 
"the  United  States  shall  subscribe  for  51%  of 
each  and  every  such  increase.  It  provides  that 
the  United  States  shall  subscribe  for  51%  of  this 
stock  at  par  and  the  remainder  shall  be  offered 

[91] 


THE  NEED  OF  THE  HOUR 


to  the  public  for  public  subscription,  and  it  pro- 
vides that  the  United  States  shall  further  sub- 
scribe at  par  to  an  amount  of  such  stock  equal  to 
that  not  taken  by  public  subscription,  and  such 
corporation  may  begin  business  as  soon  as  51% 
of  such  stock  has  been  subscribed  and  paid  for  by 
the  United  States.  It  further  provides  that  the 
United  States  through  the  shipping  board  and 
with  the  approval  of  the  President  is  authorized 
to  purchase  or  construct  vessels  suitable  in  the 
judgment  of  the  shipping  board  for  the  purpose 
of  such  corporation  with  a  view  to  transferring 
them  to  such  corporation,  and  for  this  purpose 
the  Secretary  of  the  Treasury,  upon  the  request 
of  the  shipping  board,  may  issue  and  sell  or  use 
for  such  purchase  or  construction  any  of  the 
bonds  of  the  United  States  now  available  in  the 
treasury  of  the  United  States  under  the  Act  of 
August  5,  1909,  the  Act  of  February  4,  1910, 
and  of  March  2,  1911,  relating  to  the  issue  of 
bonds  for  the  construction  of  the  Panama  Canal, 
to  a  total  amount  of  not  to  exceed  $30,000,000 
for  the  purpose  of  purchasing  and  constructing 
such  vessels.  It  further  provides  that  the  ship- 
ping board  is  authorized  to  transfer  the  vessels 
purchased  or  constructed  as  herein  provided  to 

[92] 


AN  AMERICAN  MERCHANT  MARINE 

such  corporation,  and  such  corporation  shall 
issue  to  the  United  States  in  payment  thereof,  its 
gold  bonds  bearing  interest  at  not  less  than  4% 
per  annum  and  upon  such  further  terms  and 
conditions  as  may  be  prescribed  by  the  shipping 
board,  such  bonds  to  constitute  a  first  and  per- 
manent lien  upon  such  vessels  thus  transferred 
and  upon  all  the  property  of  the  corporation, 
provided  that  the  amount  of  bonds  received  by 
the  United  States  in  payment  for  such  vessels 
shall  not  be  less  at  the  then  par  value,  than  the 
total  amount  expended  by  the  United  States  in 
the  purchase  or  construction  of  such  vessels,  and 
same  may  be  sold  by  the  Secretary  of  the  Treas- 
ury in  his  discretion  and  with  the  approval  of 
the  President,  to  reimburse  the  Treasury  for 
expenditures  made  in  the  purchase  or  construc- 
tion of  vessels.  It  also  provides  that  such  cor- 
poration shall  make  suitable  provision  for  sink- 
ing fund  and  for  the  depreciation  charges  under 
the  rules  and  regulations  to  be  prescribed  by 
such  shipping  board.  It  then  provides  that  the 
vessels  purchased  or  constructed  by  such  ship- 
ping board  and  conveyed  to  such  corporation 
shall  be  entitled  to  registry  under  the  laws  of  the 
United  States  and  shall  be  deemed  vessels  of  the 

[93] 


THE  NEED  OF  THE  HOUR 


United  States  and  entitled  to  the  benefits  and 
privileges  appertaining  to  such  vessels,  except 
that  such  vessels  shall  engage  only  in  trade  with 
foreign  countries,  or  with  the  Philippine  Islands 
and  the  Islands  of  Guam  and  Tutuila.  It  pro- 
vides that  such  vessels  shall  be  subject  to  the  di- 
rection of  the  President,  the  Secretary  of  the 
Treasury,  and  the  Postmaster  General  and  the 
Secretary  of  Commerce,  who  are  constituted  a 
board  known  as  the  Shipping  Board,  with  full 
power  to  vote  the  stock  of  the  United  States  in 
such  corporation,  and  to  do  all  the  other  things 
necessary  to  protect  the  interests  of  the  United 
States  and  to  carry  out  the  purposes  of  the  act. 
It  also  provides  that  with  the  approval  of  Con- 
gress such  Shipping  Board  may  at  any  time 
sell  the  stock  of  such  corporation  owned  by  the 
United  States.  It  also  provides  that  the  Presi- 
dent of  the  United  States  is  authorized  to  char- 
ter, lease,  or  transfer  such  naval  auxiliaries  now 
belonging  to  the  naval  establishment  of  the 
United  States  as  are  suitable  for  commercial  use 
and  which  are  not  required  for  the  navy  in  time 
of  peace,  and  vessels  now  owned  and  operated 
by  the  Panama  Railroad  Company,  to  any  cor- 
poration now  or  hereafter  organized  as  in  this 

[94] 


AN  AMERICAN  MERCHANT  MARINE 

act  provided,  upon  such  terms  and  conditions 
as  the  President  of  the  United  States  shall  pre- 
scribe. The  vessels  purchased  or  constructed  by 
the  United  States  through  the  Shipping  Board, 
with  the  approval  of  the  United  States,  shall  be 
of  a  type  as  far  as  the  commercial  requirements 
of  the  foreign  trade  of  the  United  States  may 
permit,  suitable  for  use  as  naval  auxiliaries  in 
the  naval  establishment  of  the  United  States." 
It  also  gives  the  President  at  any  time  the  right 
upon  giving  written  notice,  to  take  possession  for 
use  as  naval  auxiliaries  in  the  United  States 
Navy  or  for  other  purposes  of  any  vessels  used  by 
such  corporation  at  a  reasonable  price  or  rental. 
It  further  provides  for  the  submission  to  Con- 
gress at  the  beginning  of  each  regular  session,  of 
a  detailed  statement  of  the  expenditures  under 
this  act  and  of  all  receipts.  It  also  provides  an 
appropriation  of  $10,000,000  out  of  any  money 
in  the  treasury  of  the  United  States  not  other- 
wise appropriated.  Finally,  the  act  takes  effect 
from  date  of  its  passage.  So  this  bill,  known  as 
the  Alexander  Bill,  is  the  last  word,  so  far  as  pro- 
posed Congressional  legislation  is  concerned. 

For  many  years  the  author  has  written  and 
spoken    before    various    commercial    organiza- 

[95] 


THE  NEED  OF  THE  HOUR 


tions,  and  has  always  consistently  advocated  a 
government-owned  merchant  marine.  This  bill 
approximates,  in  some  measure,  the  plan  for  a 
government-owned  merchant  marine,  and  while 
it  differs  in  many  respects  from  the  measure  pro- 
posed by  the  author,  still  if  it  should  become  a 
law  it  would  afford  him  satisfaction,  for  it  will 
at  least  result  in  giving  a  trial  to  a  plan  whereby 
the  nation  will  operate  merchant  ships,  and 
whether  all  the  money  be  subscribed  by  the  na- 
tion or  a  part  come  from  the  general  public,  at 
least  the  government  will  control  and  operate 
these  ships  and  will  be  enabled  to  make  its  own 
freight  rates  to  our  shippers,  instead  of  com- 
pelling them  to  submit  to  the  demands  of  a  ship- 
ping trust  whose  stockholders  in  a  large  part  are 
not  in  sympathy  with  our  shippers.  So  that  the 
reader  can  compare  the  plan  last  outlined  with 
the  one  that  has  always  been  advocated  by  the 
author,  we  will  now  present  his  plan. 

The  plan  proposed  is  simply  that  our  nation 
build  ships  in  our  own  navy  yards, —  and  there 
are  eight  yards  which  can  speedily  be  put  into 
shape  for  this  purpose, —  these  ships  to  be  built 
upon  designs  furnished  by  our  own  draughts- 
men, with  special  reference  to  their  use  for  com- 

[96] 


AN  AMERICAN  MERCHANT  MARINE 

mercial  purposes  and  their  conversion  into 
auxiliaries  for  our  navy  in  time  of  war.  It  is 
believed  that  in  view  of  the  fact  that  these  ships 
are  to  be  used  as  auxiliaries  to  our  navy  and  that 
we  have  about  60,000  seamen  now  in  charge  of 
our  regular  naval  fleet  consisting  of  about  230 
ships,  it  would  be  wiser  to  put  these  merchant 
ships  in  the  navy  department  and  authorize  the 
proper  officials  to  transfer  part  of  our  regular 
naval  organization  to  the  merchant  ships.  In 
that  way  these  ships  would  have  a  crew  experi- 
enced, in  part  at  least.  Our  navy  also  has  some 
ships  that  can  probably  be  used  as  merchant 
ships  at  once.  It  has  always  seemed  to  the  au- 
thor that  this  was  the  proper  thing  to  do,  and 
that  such  action  would  improve  the  efficiency 
both  of  our  navy  and  the  merchant  marine,  for 
it  would  give  our  navy  the  opportunity  to  see 
some  service,  and  to  visit  foreign  ports  and  ob- 
serve their  ships,  defences,  habits,  etc.,  just  as  the 
foreign  ships  use  like  opportunity  in  our  ports. 
Aside  from  that  fact,  we  have  a  well  organized 
naval  board  and  many  bureaus,  such  as  yards, 
docks,  navigation,  ordinance  construction  and 
repairs,  steam  engineering,  supplies  and  ac- 
counts, medicine  and  surgery,  naval  intelligence, 

[97]  ^ 


THE  NEED  OF  THE  HOUR 


hydrographic  naval  and  medical  examination, 
board  of  observation,  retiring  board,  medical 
school  and  dispensaries,  and  general  inspector 
and  pay  corps,  and  it  seems  to  me  that  our  pres- 
ent overhead,  with  some  commercial  additions, 
such  as  bureau  of  routes,  tariff  and  finance,, 
would  easily  take  care  of  this  additional  fleet  of 
merchant  ships.  We  have  over  three  thousand 
officers  in  our  navy,  and  I  believe  it  would  be 
an  excellent  plan  to  transfer  some  of  them  to  the 
merchant  marine  department.  Then  with  this 
organization  as  a  foundation  we  would  simply 
augment  it  as  we  build  the  ships.  This  plan  has 
been  submitted  to  Admiral  Dewey,  and  he 
wrote,  in  response,  that  he  thought  it  feasible 
and  hoped  it  would  be  adopted. 

There  will  be  objections  urged  to  both  the 
Alexander  bill  and  the  plan  here  suggested. 
The  principal  objection  will  be  that  it  is  not  so 
serious  a  matter  that  the  government  need  go 
into  the  business  of  conducting  a  merchant  ma- 
rine, and  that  it  is  dangerous  for  the  government 
to  go  further  into  an  undertaking  that  is  in  a 
sense  a  business  proposition.  On  both  objections 
the  author  has  always  disagreed  with  his  oppon- 
ents, in  so  far  as  the  merchant  marine  is  con- 

[98] 


AN  AMERICAN  MERCHANT  MARINE 

cerned.  Answering  the  first  objection  that  the 
situation  is  not  sufficiently  serious,  he  disputes 
it  with  all  the  earnestness  at  his  command.  The 
government  has  for  many  years  been  in  immi- 
nent»danger,  for  in  case  of  war  it  has  never  been 
denied  that  our  navy  would  be  to  a  large  extent 
helpless  without  transports  and  auxiliaries,  for 
what,  may  I  ask,  could  six  transports  and  seven 
supply  ships  and  two  hospital  ships  and  twenty- 
one  colliers  with  95,000  tons  cargo  capacity,  ac- 
complish as  a  help  to  our  navy?  Where  would 
we  get  transports  for  our  army,  supply  ships, 
scouts,  colliers  for  our  coal,  ammunition  ships, 
refrigerating  and  distilling  ships,  dispatch  ves- 
sels and  tugs  and  depot  ships?  And  without 
these  does  any  one  claim  that  our  navy  could  be 
effective? 

As  before  stated,  every  President  from  Cleve- 
land down  to  the  present  chief  of  the  nation,  has 
brought  this  to  our  attention  most  forcibly,  and 
many  important  naval  officers  have  brought  it 
before  the  government  in  some  way  or  other. 
Where  could  we  get  these  ships  in  time  of  need? 
For  the  neutrality  treaties  forbid  other  nations 
selling  them  to  us.  Why,  we  are  fearful  even 
about  buying  any  of  the  ships  of  the  Germans 

[991 


THE  NEED  OF  THE  HOUR 


interned  at  Hoboken,  although  we  want  to  use 
them  for  peaceful  purposes  only, —  in  fact  we 
want  them  for  carrying  food  to  people  who  will 
soon  be  starving  if  we  cannot  get  ships  to  carry 
our  food  to  them.  We  have  not  bought  them, 
although  we  need  them  badly,  because  we  be- 
lieve it  might  offend  friendly  nations,  although 
it  appears  that  international  law  absolutely  gives 
us  the  right  to  buy  them  for  friendly  use.  So 
you  see,  if  <we  were  at  war,  no  nation  would  dare 
to  sell  us  ships  to  be  used  to  carry  on  a  war; 
for  they  even  object  to  our  purchasing  ships  for 
a  peaceful  purpose!  The  situation  is  exceed- 
ingly dangerous,  without  a  doubt,  and  every  mo- 
ment that  we  neglect  to  add  this  necessary  ad- 
junct to  our  fleet  we  are  guilty  of  gross  indiffer- 
ence, to  say  the  least 

Then,  too,  comes  the  matter  of  giving  our 
shippers  equal  rights  with  foreign  shippers  in 
the  export  and  import  of  their  commerce.  This 
has  always  been  denied  us,  and  how  can  we  ex- 
pect our  nation  to  go  on  with  the  great  expan- 
sion of  her  commerce,  so  necessary  to  take  care 
of  the  vast  resources  of  our  growing  nation,  if  we 
are  constantly  placed  at  so  great  a  disadvantage 
in  the  matter  of  direct  communication  with  our 

[100] 


AN  AMERICAN  MERCHANT-  -MARINE-  ''''-''•• 

customers,  that  is  to  say,  if  we  are  obliged  to 
deliver  our  goods  in  our  competitors'  delivery 
wagons  at  our  competitors'  rates  and  conveni- 
ence? A  recent  editorial  in  one  of  the  metro- 
politan journals  of  our  city  stated  that  the  war 
had  brought  about  a  slowing  up  in  our  exports 
and  there  was  no  need  of  haste  at  this  time  for 
our  government  to  operate  merchant  ships,  that 
we  had  enough  ships  for  our  present  commerce. 
But  I  deny  the  correctness  of  this  editorial  at 
this  time,  for  letters  on  file  at  Washington,  some 
of  which  I  have  previously  referred  to,  contra- 
dict this  editorial  as  well  as  recent  figures  show- 
ing our  exports  for  the  past  three  months.  Did 
this  great  journal  realize  the  fact  that  our  com- 
merce was  then  at  its  lowest  ebb,  and  that 
whether  the  war  were  ended  soon  or  not,  our  na- 
tion would  shortly  be  called  upon  to  supply  the 
world,  practically,  with  the  necessaries  of  life, 
and  that  in  view  of  the  fact  that  all  the  great 
German  merchant  ships  were  withdrawn  and 
many  of  the  largest  and  best  of  the  English  and 
French  ships,  we  would  be  far  more  helpless 
than  ever  when  our  commerce  expanded;  for 
that  condition  confronts  us  to-day?  I  repeat 
with  all  the  force  I  can  bring  to  bear  upon  it,  that 

F  loil 


THE  NEED  OF  THE  HOUR 


we  have  not  enough  ships  to-day  for  our  present 
commerce,  and  every  day  the  situation  becomes 
more  acute.  To  cite  a  recent  instance :  When  the 
Manchuria  recently  sailed  from  San  Francisco 
with  a  cargo  estimated  at  $1,200,000,  there  was 
much  more  merchandise  in  the  docks  than  the 
ship  could  possibly  carry.  Even  500  bales  of 
cotton  consigned  to  Japan  were  left  behind  for 
lack  of  cargo  space,  and  we  all  know  how  neces- 
sary it  is  to  get  to  its  place  of  destination  every 
bale  of  cotton  sold.  This  cargo  will  have  to  wait 
for  some  tramp  steamer  to  pick  it  up  and  get  it 
to  its  destination  at  some  uncertain  time;  and 
this  condition  now  exists  even  before  the  great 
increase  in  our  exports  sets  in  which  will  come 
at  any  day  in  fact  which  is  here  now.  What  will 
be  the  situation  under  improving  conditions, 
may  I  ask?  And  again,  the  editor  is  reminded 
of  a  further  fact,  that  freight  rates  have  already 
advanced  from  100%  to  1000%  since  the  with- 
drawal of  the  ships, —  so  will  any  one  argue,  in 
the  face  of  these  facts,  that  we  can  sit  supinely 
by  and  continue  as  we  have  done  for  a  quarter 
of  a  century  or  more,  and  play  a  waiting  game? 
Waiting  for  what?  Ships  will  not  rain  down 
from  heaven.  It  takes  a  year  to  construct  a  sin 

[102] 


AN  AMERICAN  MERCHANT  MARINE 

gle  merchant  ship,  such  as  our  commerce  will 
require,  and  it  will  take  several  years  to  acquire 
even  a  fair  fleet,  if  we  start  at  once, —  so  why 
wait  any  longer? 

Now  to  answer  the  criticism  that  it  is  bad  pol- 
icy to  put  our  government  in  the  shipping  busi- 
ness. Let  us  just  briefly  scan  our  government's 
recent  history.  When  the  postal  savings  bank 
was  proposed,  was  it  not  bitterly  fought  on  the 
same  grounds?  The  bankers,  who  were  its  most 
bitter  opponents,  declared  that  it  would  result  in 
depleting  their  deposits  and  drive  them  out  of 
business,  and  the  government  had  no  right  to  go 
into  the  banking  business.  What  banker  would 
make  that  statement  to-day?  The  bank  deposits 
all  over  the  country  have  steadily  increased,  and 
the  postal  banks  have  correspondingly  grown, 
and  millions  of  dollars  that  were  formerly 
hoarded  have  since  been  put  in  circulation, 
where  the  money  properly  belongs.  Who  now 
would  take  a  step  backward,  and  abolish  the 
postal  savings  banks? 

Then  let  us  take  up  for  a  moment  the  parcel 
post  business.  Who  besides  the  express  com- 
panies and  their  stockholders,  objects  to  the  gov- 
ernment reducing  the  cost  of  carrying  packages, 

[103] 


THE  NEED  OF  THE  HOUR 


thereby  reducing  the  cost  of  living?  It  is  un- 
fortunate that  some  express  companies  were  so 
overcapitalized  that  they  could  not  meet  the 
government  rates  and  were  forced  out  of  busi- 
ness. Now,  as  a  matter  of  fact,  the  only  losers 
were  the  few  stockholders  who  lost  a  portion  of 
their  dividends;  but  what  of  the  thousands  of 
people  who  are  now  receiving  a  great  direct  ben- 
efit from  the  reduction  of  express  rates?  The 
statement  that  it  put  a  great  many  employes  out 
of  business  is  not  even  correct,  for  the  govern- 
ment must  employ  men  to  deliver  these  packages 
and  have  wagons  and  the  rest  of  the  equipment 
necessary  to  transact  the  business,  and  without 
doubt  more  people  are  employed  to-day  in  the 
express  carrying  business  than  ever  before,  in- 
cluding, of  course,  the  additional  government 
employes,  and  after  a  few  years  more  no  one  will 
be  found  objecting  to  our  government  being  in 
the  parcel  post  business.  If  one  should  go 
abroad  and  tell  a  foreigner  that  some  people 
object  to  the  government  carrying  parcels  just 
as  it  does  letters,  he  would  probably  be  told  that 
he  would  better  have  their  sanity  tested. 

Now  as  to  the  Panama  Canal. —  Many,  no 
doubt,  will  recall  the  same  cry  against  our  gov- 

[  104] 


AN  AMERICAN  MERCHANT  MARINE 

ernment  undertaking  the  construction  of  the 
Canal.  Twice  it  had  been  attempted  by  a  great 
people  and  a  great  engineer,  and  twice  failure 
had  been  written  across  the  undertaking.  Then 
it  was  argued  that  we  could  not  build  it  success- 
fully, aside  from  the  immense  amount  of  money 
that  would  be  required,  and  that  if  private  capi- 
tal, mind  you,  could  not  build  it,  our  govern- 
ment surely  could  not.  Unmindful  of  this  op- 
position we  proceeded,  and,  making  use  of  our 
military,  we  not  only  completed  the  greatest 
engineering  feat  of  modern  times,  but  opened 
up  even  ahead  of  the  time  specified,  and  it  was 
built  by  the  military  and  civil  branch  of  our  gov- 
ernment, a  government  enterprise  from  start  to 
finish,  and  the  proudest  boast  of  this  nation  is 
that  it  is  our  own  enterprise,  and  who  to-day 
doubts  the  wisdom  of  the  government  in  this 
undertaking? 

Now  the  Merchant  Marine  proposition  re- 
sembles in  many  respects  the  Panama  Canal 
enterprise.  Private  capital  failed  in  the  con- 
struction of  the  Panama  Canal  because  it  had 
uppermost  in  mind  the  making  of  money.  The 
construction  of  this  Canal  would  never  have  been 
attempted  if  the  men  who  financed  it  originally 

[105] 


THE  NEED  OF  THE  HOUR 


had  not  seen  possibilities  of  tremendous  profit. 
The  natural  thing,  then,  was  for  them  to  attempt 
to  build  the  Canal  without  any  regard  for  the 
lives  or  safety  of  the  workmen,  for  human  beings 
were  held  more  cheaply  than  capital.  The  re- 
sult was  that  thousands  of  able-bodied  men  per- 
ished, for  no  provision  was  made  for  the  com- 
fort or  health  of  these  workmen.  The  cost  ex- 
ceeded by  far  the  estimates  of  the  projectors  of 
this  enterprise,  and  they  became  discouraged 
and  work  on  the  Canal  stopped. 

Now  private  enterprise  attempting  to  build  a 
merchant  marine  would  have  only  one  viewpoint 
-  a  quick  return  to  the  stockholders  who  made 
the  investment.  If  this  government  built  a  mer- 
chant marine  it  would  operate  along  entirely  dif- 
ferent lines.  First  of  all,  the  spirit  of  patriotism 
in  the  Navy  Department  is  naturally  different 
from  the  spirit  that  moves  a  business  enterprise. 
Hardships  are  endured  because  when  a  man 
enlists  in  the  navy  he  realizes  that  he  is  giving 
his  life  to  his  country.  The  government  is  actu- 
ated as  well  purely  by  a  motive  of  doing  some- 
thing that  will  ultimately  bring  peace  and  pros- 
perity to  the  nation,  and  if  the  government  built 
up  a  merchant  marine  under  the  control  and 

[106] 


AN  AMERICAN  MERCHANT  MARINE 

with  the  cooperation  of  the  navy,  the  enterprise 
would  lose  for  the  time  being  its  commercial  as- 
pect and  every  man,  from  the  Secretary  of  the 
Navy  down  to  the  seamen,  would  take  a  patriotic 
interest  in  the  success  of  the  movement,  and  this 
great  interest  would  enable  the  government  to 
achieve  a  measure  of  success  beyond  any  that 
private  enterprise  could  accomplish. 

Again,  consider  the  question  of  building  rail- 
roads in  Alaska  to  develop  that  country.  Pri- 
vate capital  was  unwilling  to  venture,  and  the 
great  resources  of  Alaska  remain  undeveloped. 
Our  nation,  however,  will  soon  undertake  this 
work,  also,  and  doubtless  it  will  accomplish  this 
successfully,  as  it  has  its  other  public  undertak- 
ings just  referred  to.  This  owning  and  operat- 
ing of  public  utilities  is  done  abroad  very 
successfully,  and  is  undertaken  by  the  govern- 
ment as  a  matter  of  fact,  and  is  not  regarded  the 
least  bit  as  an  unusual  proceeding. 

Now  the  author  does  not  wish  to  be  misunder- 
stood in  this  matter.  He  is  the  last  person  in 
the  world  wishing  to  put  too  much  responsibility 
on  the  government,  not  because  he  doubts  its 
ability  to  undertake  it,  yet  he  prefers,  whenever 
possible,  to  encourage  private  capital  and  pri- 

[107] 


THE  NEED  OF  THE  HOUR 


vate  ownership  to  develop  our  great  resources, 
because  he  believes  that  private  capital  is  nat- 
urally more  ambitious  and  energetic  and  should 
be  encouraged;  but  there  are  some  enterprises 
that  do  not  need  ambition  or  energy,  and  those 
the  government  has  already  undertaken  are  in- 
stances of  this  kind.  I  will  not  grant  that  in- 
dividual ownership  is  more  honest,  I  will  never 
grant  that.  In  the  light  of  the  recent  railroad 
exposures,  the  author  feels  he  will  not  be  dis- 
puted in  this  line  of  argument. 

So  now  we  come  down  to  the  question  of  gov- 
ernment ownership  and  control  of  steamships. 
First  of  all,  let  us  refer  briefly  to  the  great  ad- 
vantage of  government  ownership  of  steamships, 
even  as  against  private  ownership,  admitting 
that  we  could  get  private  capital  to  invest  in 
steamships  and  compete  with  the  trust,  even  with 
or  without  subsidy.  The  government,  in  the  first 
place,  is  not  organized  to  make  money  out  of  any 
of  its  enterprises.  So  that  this  government 
would  start  out  on  a  different  policy  with  its 
steamship  business  from  that  of  private  capital. 
To  illustrate,  say  the  government  thought  it  wise 
to  open  a  line  of  direct  communication  with 
some  of  the  countries  with  which  we  are  doing 

[108] 


AN  AMERICAN  MERCHANT  MARINE 

but  little  business, —  perhaps  because  of  lack  of 
regular  and  direct  means  of  communication, 
perhaps  because  no  effort  was  made  by  the  coun- 
try to  get  this  business,  and  on  that  account,  let 
us  say,  the  communication  between  such  coun- 
tries and  the  United  States  was  only  indifferently 
maintained.  Now  it  is  apparent  that  it  would 
take  some  time  before  the  business  of  transport- 
ing would  be  profitable, —  in  other  words,  there 
would  have  to  be  some  pioneering.  Private  cap- 
ital would  be  unwilling  to  pioneer  if  it  could 
traverse  routes  that  would  be  immediately  prof- 
itable, because  it  would  feel  that  its  stockholders 
would  want  immediate  dividends,  and  so  it 
would  take  a  very  long  time,  perhaps,  before  we 
would  get  regular  and  direct  communication 
with  countries  with  whom  our  trade  is  not  fairly 
well  established,  whereas  if  the  steamship  line 
were  owned  by  the  government,  by  reason  of  its 
great  saving  of  overhead  and  the  fact  that  no 
dividends  have  to  be  paid  to  stockholders,  and 
also  by  reason  of  the  fact  that  these  ships  would 
be  considered  auxiliary  cruisers  as  well,  and  it 
would  not  be  necessary  on  that  account  perhaps 
to  build  so  many  battleships  which  must  be 
maintained,  so  that  all  these  facts  could  be  taken 

[109] 


THE  NEED  OF  THE  HOUR 


into  consideration,  and  for  these  reasons  no  citi- 
zen would  feel  dissatisfied  if  the  government 
operated  at  no  profit  or  even  at  a  slight  loss,  to 
points  where  new  business  and  connections 
would  be  established,  for  the  government  builds 
for  all  time, —  corporations  may  come  and  go, 
but  this  nation  goes  on  forever,  and  our  profit 
would  come  ultimately  as  the  business  increases, 
but  our  nation  would  immediately  receive  its 
profit  in  increased  business. 

Then  take  the  case  where  the  government  en- 
tered into  fields  now  covered  by  the  ship  trust. 
The  trust  would  not  for  a  moment  think  of  put- 
ting its  fighting  ships  beside  ours,  because  it 
would  realize  the  futility  of  attempting  to  drive 
the  government  out  of  business  by  cutting  its 
rates,  and  if  the  trust  cut  the  rates  below  what 
the  government  wanted  to  meet,  would  not  our 
shippers  get  the  benefit?  So  no  matter  what  the 
result  was,  if  the  government  sent  its  ships  on  the 
high  seas  to  compete  with  the  trust,  whether  the 
trust  lowered  its  rates,  or  put  on  better  and  faster 
ships  than  our  government  built,  our  nation 
would  always  be  benefited,  and  if  our  govern- 
ment put  better  and  faster  ships  beside  the  slow 
and  antiquated  ones  the  trust  so  kindly  gives  us 

[no] 


AN  AMERICAN  MERCHANT  MARINE 

to  some  ports,  that  would  be  again  so  much  gain 
for  our  shippers.  To  illustrate :  The  fastest  ships 
sailing  between  New  York  and  South  America 
make  less  than  1 1  knots  per  hour,  and  it  takes  24 
days  to  £0  from  New  York  to  Buenos  Aires  in 
fair  weather.    The  distance  is  about  6100  knots. 
Now,  ships  controlled  by  the  trust  send  to  and 
go  from  Liverpool  or  Hamburg  to  Buenos  Aires 
in  22  days  and  the  distance  is  7,000  knots,  so  you 
see  that  the  ships  we  get  for  our  export  trade  to 
South   America   are    smaller   and   slower   and 
poorer  than  those  that  our  competitors  get  for 
their  exports  to  the  same  places.    Now  suppose 
our   government   decided   to   operate   ships    to 
South  America,  and  it  constructed  ships  to  go, 
say,  1 8  knots  instead  of  n  knots  an  hour, —  it 
would  thereby  shorten  the  distance  between  New 
York   and   Buenos   Aires  by  ten    days  and  it 
would  enable  a  merchant  in  New  York  to  get  a 
letter  or  merchandise  down  there  in  a  fortnight 
instead  of  24  days  and  a  reply  back  in  the  same 
length  of  time.    Now  see  wrhat  that  would  mean 
in  an  increase  in  our  business  to  South  America. 
We  are  truly  congratulating  ourselves  that  at  a 
cost  of  nearly  $400,000,000  we  have  shortened 
the  distance  between  New  York  and  the  west 

[in] 


THE  NEED  OF  THE  HOUR 


coast  of  South  America  by  one-third, —  now  we 
could  do  the  same  thing  on  the  east  coast  with 
5%  or  less  of  that  cost  and  make  an  additional 
saving  on  the  west  coast,  and  experts  agree  that 
it  is  more  economical  shipping  on  large  units, 
and  the  smaller  ship  is  fast  disappearing  and 
giving  way  to  the  larger  and  faster  steamship. 
There  are  ships,  and  quite  a  number  of  them, 
that  are  transporting  freight  and  passengers  be- 
tween New  York  and  Europe  that  make  even 
much  faster  time  than  18  knots,  in  fact  18  knots 
an  hour  is  slow  time  for  most  of  the  modern 
American  and  European  routes.  And  so  we  say, 
why  not  give  South  America  the  advantage  of 
these  fast  ships?  Then  the  South  American  will 
trade  much  more  abundantly  with  us,  and  will 
visit  us  much  oftener,  for  who  relishes  a  24  day 
trip  on  the  water,  with  bad  accommodations 
thrown  into  the  bargain?  And  that  is  why  many 
South  Americans  who  wish  to  come  to  America 
come  via  Europe,  over  4,000  miles  out  of  their 
way. 

Take  it  in  the  wearing  apparel  lines, —  before 
the  South  American  can  get  his  order  here  and 
his  goods  back  there,  the  season  is  over  and  he 
is  showing  goods  a  season  behind  the  times. 

[112] 


AN  AMERICAN  MERCHANT  MARINE 

The  author  has  met  many  South  Americans 
abroad,  and  he  finds  them  just  as  anxious  to  wear 
the  latest  styles  as  the  Americans,  and  with  fast 
ships  of  say  18  knots  a  South  American  could 
order  his  goods,  say,  in  February,  and  get  his 
goods  in  March,  in  ample  time  for  his  season's 
business.  If  you  want  South  American  trade, — 
and  the  newspapers  are  constantly  clamoring 
that  we  are  not  energetic  enough  down  there, — 
just  send  your  ships  there  regularly  and  let  them 
fly  the  American  flag;  let  them  be  of  the  latest 
type  of  steamship,  and  you  will  find  that  the 
South  Americans  will  respect  you  much  more 
than  they  do  now,  for  they  never  see  the  Ameri- 
can flag  except  on  some  tramp  steamer,  and  how 
can  you  ask  them  to  respect  you  under  these 
conditions? 

Every  consul  in  a  foreign  port,  if  asked  by  the 
State  Department  to  report  as  to  what  would  be 
of  most  benefit  to  this  nation  in  securing  foreign 
trade,  reports  back,  "  American  ships."  Read 
the  consular  reports  and  you  can  readily  satisfy 
yourself  on  this  point. 

Consider  the  many  beneficial  results  that 
would  follow  if  we  had  government-owned  and 
controlled  ships : — 

[113] 


THE  NEED  OF  THE  HOUR 


I.  As  to  labor.    We  would  give  employment 
to  thousands  of  able-bodied  men  as  seamen  and 
in  other  capacities  required  aboard  a  merchant 
ship.     The  employment  would  be  regular  in- 
stead of  intermittent  as  it  is  on  our  lake  steamers. 
When  the  season's  navigation  closes,  thousands 
upon  thousands  of  men  are  thrown  upon  the  big 
cities  and  added  to  the  usual  unemployed  list 
that  follows  the  slacking  down  of  the  fall  season 
and  which  the  municipalities  usually  support. 
The  oversea  commerce  would  be  operated  all 
the  year  round.    Thousands  of  workmen  would 
be  employed  in  building  these  ships. 

II.  Relation  to  commerce,     (a)   This  nation 
would  be  independent  of  the  foreign  shipping 
trust  at  all  times,  and  it  would  practically  con- 
trol the  rates  our  shippers  would  be  charged, 
instead  of  our  shippers  being  at  the  mercy  of  the 
trust. 

(b)  Our  shippers  would  be  provided  with 
up-to-date  ships  and  regular  means  of  communi- 
cation whenever  this  nation  found  such  means 
did  not  exist. 

(c)  This  means  of  communication  would  be 
permanent  and  there  would  be  no  fear  that  war 
or  any  act  of  a  foreign  nation  with  which  we 

[114] 


AN  AMERICAN  MERCHANT  MARINE 

were  not  concerned,  would  interrupt  our 
commerce. 

III.  Relation  to  our  navy.  It  is  reported  by 
the  Secretary  of  the  Navy  that  the  regular  com- 
plement for  our  present  navy  is  short  18,000 
sailors.  There  is  a  reason  for  this,  as  I  have  all 
along  pointed  out.  It  is,  without  doubt,  that  life 
on  a  warship  is  too  slow  and  monotonous,  and  a 
young  man  soon  tires  of  it  after  the  glamour  is 
passed.  Now  if  we  had  merchant  ships  and 
transferred  some  of  the  men  from  the  regular 
naval  service  to  the  merchant  ships  and  vice 
versa,  the  change  would,  I  am  sure,  be  attractive 
to  them,  and  we  could  then  train  our  own  sea- 
men and  keep  them  contented  and  happy. 

(b)  We  would  be  building  up  a  great  naval 
organization  and  a  great  body  of  experienced 
sea  going  men,  which  in  time  of  need  would  be 
of  much  national  benefit,  instead  of  doing  what 
we  are  to-day,  building  up  tremendous  naval 
strength  for  foreign  nations  from  our  own  reve- 
nues, with  the  possibility  of  these  nations  turning 
these  men  against  us  some  day.  Then,  too,  in- 
stead of  the  $300,000,000  annually  given  to  for- 
eign ship  owners  to  carry  our  oversea  commerce, 

[115] 


THE  NEED  OF  THE  HOUR 


we  would  be  paying  this  $300,000,000  out  to  our 
own  citizens  in  our  own  country. 

(c)  Our  navy  would  be  enabled  to  visit  all 
foreign  ports  with  which  we  have  communica- 
tions, and  learn  the  coast  defences  and  customs 
of  other  nations.    Our  navy  would  have  auxil- 
iaries,  which   it  needs   so  badly,   and  without 
which  no  fleet  is  safe. 

This  plan  would  enable  our  country  to  estab- 
lish commercial  relations  at  will  with  any  coun- 
try with  whom  we  wished  to  open  up  commercial 
relations. 

(d)  The  plan  would  also  tend  to  democratize 
our  navy.    It  would  give  all  sailors  an  opportun- 
ity for  excitement  instead  of  the  desultory  life 
that  they  are  now  compelled  to  lead.    It  would 
enable  our  naval  department  to  quickly  secure 
the  necessary  complement  for  our  naval  ships, 
instead  of  advertising,  as  our  government  is  un- 
successfully doing,  for  men  to  fill  our  comple- 
ment, and  finally,  it  would  give  us  American 
ships,  built  in  American  shipyards,  manned  by 
American  sailors,  and  sailing  under  the^Ameri-' 
can  flag.    Our  commerce  would  expand  by  leaps 
and  bounds,  and  it  would  not  be  long  ere  Amer- 
ica would  again  be  mistress  of  the  seas,  carrying 

[116] 


AN  AMERICAN  MERCHANT  MARINE 

her  own  commerce  in  her  own  ships,  and  this 
plan  would  ensure  for  all  time  the  stability  of 
our  commerce  and  the  safety  of  our  navy. 


[117] 


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